On January 1, 2018, the Allegheny Corporation purchased machinery for $170,000. The estimated service life of the machinery is 10 years and the estimated residual value is $5,000. The machine is expected to produce 300,000 units during its life. Required: Calculate depreciation for 2018 and 2019 using each of the following methods.

1. Straight line.

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

3. Double-declining balance.

4. One hundred fifty percent declining balance.

5. Units of production (units produced in 2018, 45,000; units produced in 2019, 40,000).

Required 1

Calculate depreciation for 2018 and 2019 using straight line method

Straight-Line Depreciation
	Choose Numerator:	/	Choose Denominator:	=	Annual Depreciation Expense
	Cost	/	Double the SL Rate	=	Depreciation Expense
	$165,000	/	10	=	$16,500
	Depreciation Expense
2018
2019

Required 2

Calculate depreciation for 2018 and 2019 using sum-of-the-years' digits.

Sum-of-the-years' digits depreciation
	Depreciable Base	x	Rate per Year	=	Depreciation Expense
2018	$165,000	x	10/55	=	$30,000
2019	$165,000	x	9/55	=

Required 3

Calculate depreciation for 2018 and 2019 using double-declining balance.

	Depreciation for the Period			End of Period
Annual Period	Beginning of Period Book Value	Depreciation Rate (%)	Depreciation Expense	Accumulated Depreciation	Book Value
2018					$0
2019				$0	$0