Question
A machine costing $22,000 with a five-year life and an estimated $2,000 salvage value is installed on January 1. The manager estimates the machine will
A machine costing $22,000 with a five-year life and an estimated $2,000 salvage value is installed on January 1. The manager estimates the machine will produce 1,000 units of product during its life. It actually
produces the following units: 200 in 1st year, 400 in 2nd year, 300 in 3rd year, 80 in 4th year, 30 in 5th year.
The total units produced by the end of year 5 exceeds the original estimatethis difference was not predicted.
(The machine must not be depreciated below its estimated salvage value.) Prepare a table with the following
column headingsYear, Straight-Line, Units-of-Production, Double-Declining-Balanceand then compute
depreciation expense for each year (and total depreciation for all years combined) under each method.
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