Schillig & Gray Industries purchased a new machine at the beginning of 2011 for $9,500. The company expected the machine to last for four years and have a salvage value of $500. The productive life of the machine was estimated to be 180,000 units. Yearly production was as follows: in 2011 it produced 50,000 units; in 2012 it produced 45,000 units; in 2013 it produced 30,000 units; and in 2014 it produced 55,000 units.

Requirements

1. Calculate the depreciation expense for each year of the four-year life of the machine using the following methods. (Round to the nearest dollar.)

a. Straight-line method

b. Double-declining balance method

c. Activity method using units

2. For each method, give the amount of accumulated depreciation that would be shown on the balance sheet at the end of each year.

3. Calculate the book value of the machine at the end of each year for each method.