Question
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $37,300. The printer is expected to have a four-year useful
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $37,300. The printer is expected to have a four-year useful life and a $3,900 salvage value. The expected print production is estimated at $1,774,500 pages. Actual print production for the four years was as follows:
Year 1 | 552,700 |
---|---|
Year 2 | 482,600 |
Year 3 | 378,000 |
Year 4 | 386,200 |
Total | 1,799,500 |
The printer was sold at the end of Year 4 for $4,150.
Required:
a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.
b. Compute the depreciation expense for each of the four years, using units-of-production depreciation.
c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.
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