Answer:
Straight line for 2015-2020= $37,500 each year
Double Declining 2015 = $83,500, other years are explained
Untis of production 2015= $45,000.2, other years are in the explanation.
Explanation:
The completion of the question is as follows
FOr Units of Production, (Assume annual production in platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.)
The question is to determine and compute the depreciation expense for 2015-2020 as follows
a) Straight line method
Formula = Cost of Equipment - The residual value / useful life of the equipment
= $250,500- $25,500 / 6 years
= $37,500
Year 2015 = $37,500
Year 2016 = $37,500
Year 2017 = $37,500
Year 2018 = $37,500
Year 2019 = $37,500
Year 2020 = $37,500
b) Double Declining Balance
Formula = The straight line method rate x 2 x The net book value of the machine
= 1/6 x 2 x $250,500
2015= $83,500
2016 = 1/6 x 2 x $250,500- $83,500 = $55,666.67
following the same process of getting the book value for each year, subtract the depreciation from the book vaule for the next year
2017= 31,111.11
2018= 24,740.74
2019= 16,493..83
2020= 7,487.65
c)The unit of productio method
First we get the unit cost = The Cost of the machine - its salvage value/ the number of cuttings
= $250500-$25500 / 700,000 cuttings = 0.32143
Year 2015 = 0.32143 x 140,000 = 45,000.2
Year 2016 = 0.32143 x 180,000= 57,857.4
Year 2017 = 0.32143 x 100000= 32,413
Year 2018 = 0.32143 x 110,000= 35,357.3
Year 2019 = 0.32143 x 80,000= 25,714.4
Year 2020 = 0.32143 x 90,000= 28,928.7
