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A machine costing $209,800 with a four-year life and an estimated $15,000 salvage value is installed in Luther Company's factory on January 1. The factory
A machine costing $209,800 with a four-year life and an estimated $15,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 122,700 in Year 1, 122,700 in Year 2, 119,700 in Year 3, 131,900 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Straight Line Units of Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation. Straight-Line Depreciation Year Depreciation Expense Year 1 $ 48,700 Year 2 48,700 Year 3 48,700 Year 4 48,700 194,800 Total $ Straight Line Units of Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Units of Production Year Units per unit Year 1 122,700 122,700 Year 2 Depreciable Depreciation Units 122,700 $ 0.40 122,700 $ 0.40 122,700 $ 0.40 52,760 $ 0.40 $ 420,860 Depreciation Expense $ 49,080 49,080 49,080 21,104 168,344 Year 3 119,700 131,900 Year 4 Total Straight Line Units of Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double- declining-balance. End of Period DDB Depreciation for the Period Beginning of Period Book Depreciation Depreciation Rate Value Expense Year Accumulated Depreciation Book Value Year 1 % $ 0 O O Year 2 % 0 Year 3 0 Year 4 % 0 O Total $ 0
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