Problem 8-2A Depreciation methods LO P1 A machine costing $209,.200 with a four-
ID: 2508515 • Letter: P
Question
Problem 8-2A Depreciation methods LO P1 A machine costing $209,.200 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory c January 1. The factory manager estimates the machine will produce 483,000 units of product during its life. It actually produces the following units: 122,100 in 1st year, 123,300 in 2nd year, 120,000 in 3rd year, 127600 in 4th year. The total number of units produced the end of year 4 exceeds the original estimate-this difference was not predicted. (The machine must not be depreclated below its estimated salvage value.) Required Co te depreciation for each year (and total depreciation of all years combined) for the machine under each depreclation method Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar) Complete this question by entering your answers in the tabs below. Units of Straight Line production DDB. Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Straight-lin depreciation Depreciation YearExplanation / Answer
Calculate depreciation for each year :
Straight line depreciation = (209200-16000/4) = 48300
Unit of production method = (209200-16000/483000) = 0.40 per unit
Double decline method :
Straight line rate = 100/4 = 25%
Double decline rate = 25*2 = 50%
Year depreciation expense 1 48300 2 48300 3 48300 4 48300