A machine was acquired on January 1, 2015, at a cost of $80,000.The machine...

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Accounting

A machine was acquired on January 1, 2015, at a cost of $80,000.The machine was originally estimated to have a residual value of$5,000 and an estimated life of 5 years. The machine is expected toproduce a total of 100,000 components during its life, as follows:15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and15,000 in 2019.
Instructions
(a)   Calculate the amount of depreciation to be chargedeach year, using each of the following methods:
   1.   Straight-line method
   2.   Units-of-production
   3.   Double diminishing-balance
(b)   Which method results in the highest depreciationexpense during the first two years? Over all five years?

Answer & Explanation Solved by verified expert

3.6 Ratings (509 Votes)

a 1 Straight line method 80000 5000 5 15000 2 Units of production 80000 5000 100000 X 15000 11250 3 Double declining balance 80000 X 40 32000 See Answer

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Transcribed Image Text

In: AccountingA machine was acquired on January 1, 2015, at a cost of $80,000.The machine was...A machine was acquired on January 1, 2015, at a cost of $80,000.The machine was originally estimated to have a residual value of$5,000 and an estimated life of 5 years. The machine is expected toproduce a total of 100,000 components during its life, as follows:15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and15,000 in 2019.Instructions(a) Calculate the amount of depreciation to be chargedeach year, using each of the following methods: 1. Straight-line method 2. Units-of-production 3. Double diminishing-balance(b) Which method results in the highest depreciationexpense during the first two years? Over all five years?