Alternative Depreciation Methods

Straight-line (SL)

Depreciation expense =	Cost Residual value
	Life in years

Declining-balance (DB) or Accelerated method. (200% maximum Declining rate, if the declining rate is 200% it is called Double Declining Balance)

DB Depreciation Rate =	Declining rate
	Life in years

Depreciation expense = DB Depreciation Rate x Beginning of the year Book Value

Depreciation expense = DB Depreciation Rate x (Cost Accumulated depreciation)

Activity-Based (Units of Production)

Depreciation rate per unit =	Cost Residual value
	Life in units of production

Depreciation expense = Depreciation rate per unit x Units of production for the year

A new stamping machine was purchased at a cost of $125,000. The estimated residual value is $20,000, and the estimated useful life is 3 years. The estimated productive life of the machine is 150,000 units.

Following the depreciation example on page 7-5 of the VLN, determine Straight line accumulated depreciation year 2: __________________