Depreciation Methods Lord Company purchased a machine on January 2, 2016, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During 2016, Lord produced 12,000 units in 2,500 hours. In 2017, Lord produced 15,000 units in 3,000 hours.

Required:

1 a. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the Straight-line method. 

b. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the activity method based on hours worked. LORD COMPANY Depreciation Schedule Activity method.

c. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the activity method based on units of output. LORD COMPANY Depreciation Schedule Activity method.

d. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for sum-of-the-years'-digits methods. Round your answers to the nearest dollar. 

e. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for double-declining-balance methods. Round your answers to the nearest dollar.

2. methods are appropriate when a company estimates that the service potential of the asset will decline more quickly in the early periods of the asset's useful life. methods are appropriate when the service life of an asset is affected primarily by the amount the asset is used.

Answer rating: 100% (QA)

Solution 1a LORD Company Depreciation Schedule SLM Year Asset Cost Depreciable Cost Depreciation Exp... View the full answer