On January 1, 2019 a machine costing $330,000 with a 4-year service life and an estimated $3,000 residual value was purchased. It was also estimated that the machine would produce 50,000 units during its life. The actual units produced during its first 2 years of operation were 9,000 and 10,000 respectively.

Calculate the amount of depreciation expense for the 2019 and 2020 under each of the following assumptions:

(a) Straight-line.

(b) Double-declining-balance.

(c) Units-of-production.

ANSWER TO QUESTION 4

(a) straight line method:

Calculations:

year

Year's amortization calculation

Amortization expense

Book value

(b) double declining balance:

Calculations:

year

Year's amortization calculation

Amortization expense

Book value

(c)Unit of production method:

Calculations:

year

Year's amortization calculation

Amortization expense

Book value