Answer:
a. Straight-line method
Depreciation Expense for the first year: $333.75
b. Double-declining-balance method
Depreciation Expense for the first year: $667.5
c. Units-of-output method
Depreciation Expense for the first year: $450
Explanation:
a. Straight-line method
Depreciation Expense each year is calculated by following formula
Annual Depreciation Expense = (Cost of machine − Residual Value)/Useful Life = ($1,410 - $75)/4 = $333.75
Depreciation Expense for the first year: $333.75
b. Double-declining-balance method
Under the straight-line method, useful life is 4 years, so the asset's annual depreciation will be 25% of the Depreciable cost.
Depreciable cost = Total cost of machine - Residual value = $1,410-$75 = $1.335
Under the double-declining-balance method the 25% straight line rate is doubled to 50% - multiplied times
Depreciation Expense for the first year = $1.335 x 50% = $667.5
c. Units-of-output method
Depreciation Expense per copy = (Cost of machine − Residual Value)/Life in Number of Units = ($1,410 - $75)/13,350 = $0.1
Depreciation Expense for the first year = Depreciation Expense per copy x number of copies were made the first year = $0.1 x 4,500 = $450
