Depreciation Methods

The Gruman Company purchased a machine for $ 220,000 on January 2, 2013. It made the following estimates:

Service life	5 years or 10,000 hours
Production	200,000 units
Residual value	$ 20,000

In 2013, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2014, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answer to the nearest dollar.

Required:

Depreciation expense

Compute the depreciation for 2013 and 2014 under each of the following methods: Straight-line method

2013	$
2014	$

Sum-of-the-years'-digits method

2013	$
2014	$

Double-declining-balance method

2013	$
2014	$

Activity method based on hours worked _______

Activity method based on units of output _______

For each method, what is the book value of the machine at the end of 2013? At the end of 2014?

Straight-line method

2013	$
2014	$

Sum-of-the-years'-digits method

2013	$
2014	$

Double-declining-balance method

2013	$
2014	$

Activity method based on hours worked ______

Activity method based on units of output ______

If Gruman used a service life of 8 years or 15,000 hours and a residual value of $10,000, what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods?Straight-line method

2013	$
2014	$

Sum-of-the-years'-digits method

2013	$
2014	$

Double-declining-balance method

2013	$
2014	$

Book value Straight-line method

2013	$
2014	$

Sum-of-the-years'-digits method

2013	$
2014	$

Double-declining-balance method

2013	$
2014	$