Question

Ramer Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, 2013:
Purchase price ............ $ 80,000
Delivery cost ............ $ 2,500
Installation charge .......... $ 850
Estimated life ............ 5 years
Estimated units ............ 160,000
Salvage estimate ........... $ 3,350
During 2013, the machine produced 35,000 units and during 2014, it produced 36,000 units.

Required
Determine the amount of depreciation expense for 2013 and 2014 using each of the following methods:
a. Straight-line.
b. Double-declining-balance.
c. Units of production.
d. MACRS, assuming that the machine is classified as seven-year property.



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  • CreatedOctober 26, 2013
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