456 Chapter 10 Plant Assets, Natural Resources, and Intangibles A machine costing $257,500 with a four-year life and an estimated $20.000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,600 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate-this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.) Problem 10-2A Depreciation methods P1 Required Prepare a table with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Check Year 4: units-of- production depreciation, $4,300; DDB depreciation, $12,187 Year Straight-Line Units-of-Production Double-Declining-Balance Problem 10-3A Asset cost allocation straight-line depreciation C1 P1 In January 2017, Mitzu Co. pays $2.600,000 for a tract of land with two buildings on it. It plans to demol- ish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $644,000, with a useful life of 20 years and a $60,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $420,000 that are expected to last another 12 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,736.000 The company also incurs the following additional costs: 328,400 175,400 Cost of additional land grading