Answer:
$13,300 for each of the four years
Unit of output
$9800
$18900
$16100
$8400
double declining
27530
13765
6882.5
3441.25
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
( $55,060 - $1,860) / 4 = $13,300 each year
Activity method based on hours worked = (hours worked that year / total hours of the machine) x (Cost of asset - Salvage value)
( $55,060 - $1,860) / 7600 = 7
year 1 = 7 x 1400 = 9800
year 2 = 7 x 2700 = $18900
year 3 = 7 x 2300 = $16100
year 4 = 7 x 1200 = $8400
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2/4 = 0.5
Year 1 = $55,060 x 0.5 = 27530
book value = $55,060 - 27530 = 27530
year 2 = 27530 x 0.5 = 13765
book value = 27530 - 13765 = 13765
year 3 = 13765 x 0.5 = 6882.50
