Depreciation Methods

Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates:

Service life	5 years or 10,000 hours
Production	180,000 units
Residual value	$ 18,000

In 2019, Gruman uses the machine for 1,700 hours and produces 40,000 units. In 2020, Gruman uses the machine for 1,400 hours and produces 30,000 units. If required, round your final answers to the nearest dollar.

Required:

Compute the depreciation for 2019 and 2020 under each of the following methods:

Straight-line method

2019	$ fill in the blank 1
2020	$ fill in the blank 2

Sum-of-the-years'-digits method

2019	$ fill in the blank 3
2020	$ fill in the blank 4

Double-declining-balance method

2019	$ fill in the blank 5
2020	$ fill in the blank 6

Activity method based on hours worked

2019	$ fill in the blank 7
2020	$ fill in the blank 8

Activity method based on units of output

2019	$ fill in the blank 9
2020	$ fill in the blank 10

For each method, what is the book value of the machine at the end of 2019? At the end of 2020?

Straight-line method

2019	$ fill in the blank 11
2020	$ fill in the blank 12

Sum-of-the-years'-digits method

2019	$ fill in the blank 13
2020	$ fill in the blank 14

Double-declining-balance method

2019	$ fill in the blank 15
2020	$ fill in the blank 16

Activity method based on hours worked

2019	$ fill in the blank 17
2020	$ fill in the blank 18

Activity method based on units of output

2019	$ fill in the blank 19
2020	$ fill in the blank 20

If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000 , what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods?

Depreciation expense

Straight-line method

2019	$ fill in the blank 21
2020	$ fill in the blank 22

Sum-of-the-years'-digits method

2019	$ fill in the blank 23
2020	$ fill in the blank 24

Double-declining-balance method

2019	$ fill in the blank 25
2020	$ fill in the blank 26

Book value

Straight-line method

2019	$ fill in the blank 27
2020	$ fill in the blank 28

Sum-of-the-years'-digits method

2019	$ fill in the blank 29
2020	$ fill in the blank 30

Double-declining-balance method

2019	$ fill in the blank 31
2020	$ fill in the blank 32