7-5

A machine costing $211,400 with a four-year life and anestimated $15,000 salvage value is installed in Luther Company’sfactory on January 1. The factory manager estimates the machinewill produce 491,000 units of product during its life. It actuallyproduces the following units: 121,600 in 1st year, 123,900 in 2ndyear, 120,800 in 3rd year, 134,700 in 4th year. The total number ofunits produced by the end of year 4 exceeds the originalestimate—this difference was not predicted. (The machine must notbe depreciated below its estimated salvage value.)

  
Required:

Compute depreciation for each year (and total depreciation ofall years combined) for the machine under each depreciation method.(Round your per unit depreciation to 2 decimal places.Round your answers to the nearest whole dollar.)

Compute depreciation for each year (and total depreciation ofall years combined) for the machine under each Straight-linedepreciation.

	Straight-Line Depreciation Year Depreciation Expense 1 $211,400 2 3 4 Total $211,400

Compute depreciation for each year (and total depreciation ofall years combined) for the machine under each Units ofproduction.

	Units of Production Year Depreciable Units Depreciation per unit Depreciation Expense 1 2 3 4

Compute depreciation for each year (and total depreciation ofall years combined) for the machine under eachDouble-declining-balance.

	DDB Depreciation for the Period End of Period Year Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 1 % $0 2 % 0 3 % 0 4 % 0 $0