On January 2, Gannon Co purchases and installs a new machine costing $312,000 with a five year life and an estimated $28,000 salvage value Management estimates the machine will produce 1,136,000 units of product during its life Actual production of units is as follows year 1, 245,600 year 2, 230,40...

Cost of machine 312000 Less estimated salvage value 28000 Total depreciable cost 284000 Year Straigh ...

On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life

Question:

On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life and an estimated $28,000 . Management estimates the machine will produce 1,136,000 units of product during its life. Actual production of units is as follows: year 1, 245,600; year 2, 230,400; year 3, 227,000; year 4, 232,600; and year 5, 211,200. 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 .)

Required
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 depreciationmethod.

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...