Depreciation Methods

On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $90,000, and its estimated useful life was four years or 850,000 cuttings, after which it could be sold for $5,000.

Required

a. Calculate each years depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar): 1. Straight-line. 2. Double-declining balance. 3. Units-of-production. (Assume annual production in cuttings of 200,000; 350,000; 260,000; and 40,000.)

b. Assume that the machine was purchased on July 1, 2015. Calculate each years depreciation expense for the machine's useful life under each of the following depreciation methods: 1. Straight-line. 2. Double-declining balance.

1. Straight-Line Depreciation Expense Year 2015 $ 21,250 2016 21,250 2017 21,250 2018 21,250 2. Double-declining balanc Depreciation Expense Year 2015 45,000 2016 22,500 2017 11 ,250 2018 5,625 2019 3. Units of Production Depreciation Expense Year 2015 20,000 2016 35,000 2017 26,000 2018 4,000