On January 1, 2019, Blue Company, a small machine-tool manufacturer, acquired for $2,590,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value was estimated to be $84,400. Blue estimates that the new equipment can produce 17,300 machine tools in its first year. It estimates that production will decline by 1,690 units per year over the remaining useful life of the equipment. The following depreciation methods may be used: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years-digits, and (4) units-of-output. For tax purposes, the class life is 7 years. Use the MACRS tables for computing depreciation.

Compute accumulated depreciation by using MACRS and optional straight-line method for the 3-year period ending December 31, 2021. Ignore present value considerations.

		Accumulated Depreciation
Methods		2019		2020		2021
MACRS		$		$		$
Optional straight-line method		$		$		$

Recovery Year 1 2 3 3-year (200% DB) 33.33 44.45 14.81* 7.41 4...... 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 MACRS Depreciation Rates by Class of Property 5-year 7-year 10-year 15-year (200% DB) (200% DB) (200% DB) (150% DB) 20.00 14.29 10.00 5.00 32.00 24.49 18.00 9.50 19.20 17.49 14.40 8.55 11.52 12.49 11.52 7.70 11.52 8.93* 9.22 6.93 5.76 8.92 7.37 6.23 8.93 6.55* 5.90* 4.46 6.55 5.90 6.56 5.91 6.55 5.90 3.28 5.91 5.90 5.91 5.90 5.91 ... 2.95 20-year (150% DB) 3.750 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462" 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 *Switchover to straight-line depreciation