Answer:
STRAIGHT LINE METHOD
Year dep expense acc dep net book value
- $60,000.00
1 $10,800.00 $10,800.00 $49,200.00
2 $10,800.00 $21,600.00 $38,400.00
3 $10,800.00 $32,400.00 $27,600.00
4 $10,800.00 $43,200.00 $16,800.00
5 $10,800.00 $54,000.00 $6,000.00
units-of-production
Year Production rate dep expense acc dep net book value
- $60,000.00
1 10,000 0.36 $3,600.00 $3,600.00 $56,400.00
2 20,000 0.36 $7,200.00 $10,800.00 $49,200.00
3 30,000 0.36 $10,800.00 $21,600.00 $38,400.00
4 40,000 0.36 $14,400.00 $36,000.00 $24,000.00
5 50,000 0.36 $18,000.00 $54,000.00 $6,000.00
Explanation:
Straight-line method
60,000 - 6,000 = 54,000
54,000/5 = 10,800 depreciation per year
units-of-productions
First, we calculate the production for each year. adding10,000 tothe previous year production.
Then, we add them all and calculate the rate:
54,000 / 150,000 = 0.36
Finally we multiply each production by the rate to get the depreciation expense
10,000 x 0.36 3,600
20,000 x 0.36 = 7,200
and so on.
