1. epreciation Methods

   Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates:

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

   In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answers to the nearest dollar.

   Required:

   1. Compute the depreciation for 2016 and 2017 under each of the following methods:
   1. Straight-line method

      2016	$ fill in the blank 1
      2017	$ fill in the blank 2

   2. Sum-of-the-years'-digits method

      2016	$ fill in the blank 3
      2017	$ fill in the blank 4

   3. Double-declining-balance method

      2016	$ fill in the blank 5
      2017	$ fill in the blank 6

   4. Activity method based on hours worked

      2016	$ fill in the blank 7
      2017	$ fill in the blank 8

   5. Activity method based on units of output

      2016	$ fill in the blank 9
      2017	$ fill in the blank 10

   2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017?
   1. Straight-line method

      2016	$ fill in the blank 11
      2017	$ fill in the blank 12

   2. Sum-of-the-years'-digits method

      2016	$ fill in the blank 13
      2017	$ fill in the blank 14

   3. Double-declining-balance method

      2016	$ fill in the blank 15
      2017	$ fill in the blank 16

   4. Activity method based on hours worked

      2016	$ fill in the blank 17
      2017	$ fill in the blank 18

   5. Activity method based on units of output

      2016	$ fill in the blank 19
      2017	$ fill in the blank 20

   3. 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?

   Depreciation expense

   1. Straight-line method

      2016	$ fill in the blank 21
      2017	$ fill in the blank 22

   2. Sum-of-the-years'-digits method

      2016	$ fill in the blank 23
      2017	$ fill in the blank 24

   3. Double-declining-balance method

      2016	$ fill in the blank 25
      2017	$ fill in the blank 26

   Book value

   1. Straight-line method

      2016	$ fill in the blank 27
      2017	$ fill in the blank 28

   2. Sum-of-the-years'-digits method

      2016	$ fill in the blank 29
      2017	$ fill in the blank 30

   3. Double-declining-balance method

      2016	$ fill in the blank 31
      2017	$ fill in the blank 32