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You are a financial analyst for Kelly Construction Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you
You are a financial analyst for Kelly Construction Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $286,000. The estimated useful life is 16 years, and the estimated residual value is $76,560. The machine has an estimated useful life in productive output of 238,000 units. Actual output was 39,000 in year 1 and 35,000 in year 2. Required: 1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) a. Straight-line method. Year Depreciation Expense Accumulated Depreciation Net Book Value At acquisition 1 b. Units-of-production method. Year Depreciation Expense Accumulated Depreciation Net Book Value At acquisition 1 2 c. Double-declining-balance method. Year Depreciation Expense Accumulated Depreciation Net Book Value At acquisition 1 2
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