Copy Service Co. purchased a new color copier at the beginning of 2010 for $42,000. The copier
Question:
Copy Service Co. purchased a new color copier at the beginning of 2010 for $42,000. The copier is expected to have a five-year useful life and a $6,000 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy production for the five years was as follows.
2010 550,000
2011 480,000
2012 380,000
2013 390,000
2014 240,000
Total 2,040,000
The copier was sold at the end of 2014 for $5,200.
Required
a. Compute the depreciation expense for each of the five years, using double-declining- balance depreciation.
b. Compute the depreciation expense for each of the five years, using units-of-production
depreciation. (Round cost per unit to three decimal places.)
c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Step by Step Answer:
a DoubleDeclining Balance Cost Accum Depr x 2 x SL Rate Depr Exp Per Year SL Rate 1 5 20 2008 42000 0 x 2 x 20 16800 2009 42000 16800 x 2 x 20 10080 2...View the full answer
