problem 9-5B

On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life Problem 9-5B and an estimated $28,000 residual value. Management estimates the machine will produce 1, 136,000 units Depreciation methods of product during its life. Actual production of units is as follows: year 1, 245,600; year 2, 230,400; year 3, 227,000; year 4, 232,600; and year 5, 211,200. The total number of units produced by the end of year 5 exceeds the original estimate-this difference was not predicted. (The machine must not be depreciated below its estimated residual value.) Required Prepare a table with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Year Straight-Line Units-of-Production Double-Declining-Balance Check DDB Depreciation, Year 3, $44,928; U-of-P Depreciation, Year 4, $58, 150 a used machine for $130,000 and readies it for use the next day at a cost Problem 9-6B