Required 1:

Depreciation expense per unit

= (Cost of equipment - Salvage value)/Estimated total number of units produced

=$3,100,000$160,000 / 700,000

=$4.2

Depreciation expenses for first year = Number of units produced in first year x Depreciation expense per unit

=80,000x$4.2

=$336,000

Required 2:

Double declining deprecation rate

= 2 x 1/Useful life

=28

=25%

Depreciation expense for the first year

= Cost of equipment x Double declining deprecation rate

=3,100,00025%

=$775,000

Required 3:

Depreciation expense for the first year

= (Cost of equipment - Salvage value)/Useful life

=3,100,000160,0008 / 8

=$367,500

Depreciation Schedule:

In the space below, provide the amounts of depreciation for the first four years using the Double Declining Balance method from the previous question. See Required 2.