Lawson Company purchased Equipment on January 1, 2020 for $10,000.The estimated useful life of the equipment is five years or 100,000 units.The salvage value is estimated to be $1,000.During 2020 the equipment was used to produce 25,000 units.

First, in the spaces below put the necessary data to be used in the calculations.Second, in the boxes below, calculate depreciation for 2020 using each of the methods indicated.Place your answers in the boxes under the name for each method.Notice the effect of the varying depreciation methods on Net Income in the Income Statements to the right.

Straight-line Units-of-production Double-declining balance

Sales 100,000 100,000 100,000

COGS 75,000 75,000 75,000

Gross Profit 25,000 25,000 25,000

Expenses 15,000 15,000 15,000

Depreciation Expense - - -

--------- ---------- -----------

Total Expenses 15,000 15,000 15,000

--------- -------- --------

Net Income 10,000 10,000 10,000

List the formulas you created to calculate the amount of depreciation.

1. Cost
2. EUL in Years
3. EUL in Units
4. Salvage Value
5. Units Produced this year
6. Beginning balance in accumulated depreciation