Question: Computing Depreciation under Alternative methods At the beginning of the year, Palermo Brothers, Inc., Purchased a new plastic water bottle making machine at a cost

Computing Depreciation under Alternative methods
At the beginning of the year, Palermo Brothers, Inc., Purchased a new plastic water bottle making machine at a cost of $100,000. The estimated residual value was $20,000. Assume that the estimated useful life was eight years and the estimated productive life of the machine was 220,000 units. Actual annual production was as follows:
Year 1 units 40,000 units
Year 2 units 50,000 units
Year 3 units 60,000 units
Year 4 units 70,000 units
Required:
1. Assuming a half year accounting convention, compute depreciation expense for years 1 & 2 under:
a. Straight-line (S/L)
b. Sum of the years Digits (SYD)
c. Double-declining-balance (DDB)
d. Units of production (use two decimal places for the per unit output factor)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!