At the beginning of a fiscal year, Alexander Company buys a machine for $ 48,000. The machine has an estimated life of five years and an estimated salvage value of $ 4,000.
Using the following four methods, determine the annual depreciation of the machine for each of the estimated five years of its life, the accumulated depreciation at the end of each year, and the book value of the machine at the end of each year. Round annual depreciation to whole dollars.
a. Straight-line method
b. Double-declining-balance method
c. Units-of-production method (Useful life is 420,000 units. Year 1 use is 120,000 units, Year 2 use is 100,000 units, Year 3 use is 90,000 units, Year 4 use is 60,000 units, and Year 5 use is 50,000 units.) Round calculations to 3 decimal places. Year 5 depreciation should be rounded to balance.
d. MACRS method (Assume that the asset was purchased after 1986 and is seven-year property.) Year 8 depreciation should be rounded to balance.