On January 2, Gillette Co. purchases and installs a new machine costing $360,000 with a five year life and an estimated $33,000 salvage value. Management estimates the machine will produce 2,180,000 units of product during its life. Actual production of units is as follows: year 1, 425,000; year 2, 452,000; year 3, 445,000; year 4, 438,000; and year 5, 441,000. The total number of units produced by the end of year 5 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)
Prepare a table with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.

  • CreatedMarch 18, 2015
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