Paper Printing Company purchased a copy machine for

$ 65 comma 000$65,000

on January 1, 2010. The copy machine had an estimated useful life of five years or

1 comma 000 comma 0001,000,000

copies. Paper Printing estimated the copy machine's salvage value to be

$ 5 comma 000$5,000.

The company made

250 comma 000250,000

copies in 2010 and

190 comma 000190,000

copies in 2011.Requirements

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1. Calculate the depreciation expense for each year using the straight line method.

		-		=		/		=	Depreciation expense
		-		=		/		=

Now we can determine the depreciation per unit. (Round to two decimal places.)

		/		=	Cost per copy
		/		=

Now that the cost per unit has been established we can now depreciate the copy machine based on the number of copies produced.

Year			x		=	Depreciation expense
2010			x		=
2011			x		=

2. Which method portrays the actual use of this asset more accurately? Explain your answer.

When using straight-line depreciation the depreciation expense

is higher at the end of life of the asset

is lower at the end of the life of the asset

remains the same every year

. Straight-line depreciation assumes that the asset will be used

equally

less

more

every year. Activity depreciation is also known as

straight line

units of production

double declining balance

. The activity method depends on the

actual

estimated

number of units produced.