Problem $10-2$A Depreciation methods $P1$

A machine costing $$257,500$ with a fouryear life and an estimated $$20,000$ salvage value is installed in Luther Company's factory on

January $1.$ The factory manager estimates the machine will produce $475,000$ units of product during its life. It actually produces the

following units: $220,000$ in Year $1,124,600$ in Year $2,121,800$ in Year $3,$ and $15,200$ in Year $4.$ The total number of units produced by the

end of Year $4$ exceeds the original estimate$-$this difference was not predicted. Note: The machine cannot be depreciated below its

estimated salvage value.

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 depreciation method.

Check Year $4$: units$-$of$-$production depreciation, $$4,300$; DDB depreciation, $$12,187$This problem calculates depreciation for an asset using the three methods $-$ Straight$-$Line, Units$-$of$-$Production, and Double$-$Declining Balance.

Some reminders:

The total depreciation for all the methods should be the same. If the total is not the same for each method, you do have an error.

For stsraight$-$line depreciation, the depreciation will be the same for each year.

For double$-$declining balance, make sure the book value does not go below the salvage value.

For units$-$of$-$production, make sure to only calculate depreciation on the total number of units.