Grove Co. acquired a production machine on January 1, 2022, at a cost of $720,000. The machine is expected to have a four-year useful life, with a salvage value of $120,000. The machine is capable of producing 100,000 units of product in its lifetime. Actual production was as follows: 22,000 units in 2022; 32,000 units in 2023; 28,000 units in 2024; 18,000 units in 2025. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset’s life, using three alternative depreciation methods a–c:

Required:
Identify the depreciation method used for each of the preceding comparative balance sheet presentations a–c. If a declining balance method is used, be sure to indicate the percentage (150% or 200%).

Transcribed Image Text:

a. b. Depreciation Method? 2025 120,000 120,000 120,000 At December 31 2024 270,000 228,000 120,000 2023 420,000 396,000 180,000 2022 570,000 588,000 360,000