Depreciation Methods

Lord Company purchased a machine on January 2, 2016, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During 2016, Lord produced 12,000 units in 2,500 hours. In 2017, Lord produced 15,000 units in 3,000 hours.

Required:

1 a. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the Straight-line method.

LORD COMPANY
Deprecation Schedule
Straight-line
	Beginning Book Value	Depreciation	Ending Book Value
2016	$	$	$
2017	$	$	$

b. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the activity method based on hours worked.

LORD COMPANY
Depreciation Schedule
Activity method: Hours worked
	Beginning Book Value	Depreciation	Ending Book Value
2016	$	$	$
2017	$	$	$

c. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the activity method based on units of output.

LORD COMPANY
Depreciation Schedule
Activity method: Units of output
	Beginning Book Value	Depreciation	Ending Book Value
2016	$	$	$
2017	$	$	$

d. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for sum-of-the-years'-digits methods. Round your answers to the nearest dollar.

LORD COMPANY
Depreciation Schedule
Sum-of-the-years'-digits
	Beginning Book Value	Depreciation	Ending Book Value
2016	$	$	$
2017	$	$	$