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A machine that produces cellphone components is purchased on January 1, 2016, for $100,000. It...

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Accounting

A machine that produces cellphone components is purchased on January 1, 2016, for $100,000. It is expected to have a useful life of four years and a residual value of $10,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2016, 50,000 in 2017, 60,000 in 2018, and 50,000 in 2019. The company has a December 31 year end.

Required:

a.) Calculate the amount of depreciation to be charged each year, using each of the following methods:

i.) Straight-line method

ii.) Units-of-production method

iii.) Double-diminishing method

b.) Which method results in the highest depreciation expense:

i.) during the first two years?

ii.) over all four years?

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