Todd Service Company purchased a copier on January 1, 2016, for $25,000 and paid an additional $500

Question:

Todd Service Company purchased a copier on January 1, 2016, for $25,000 and paid an additional $500 for delivery charges. The copier was estimated to have a life of four years or 1,000,000 copies. Salvage value was estimated at $1,500. The copier produced 250,000 copies in 2016 and 270,000 copies in 2017.

Required

Compute the amount of depreciation expense for the copier for calendar years 2016 and 2017, using these methods:

a. Straight-line.

b. Units-of-production.

c. Double-declining-balance.

d. MACRS, assuming that the copier is classified as five-year property.

Salvage Value
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...