A machine that produces cellphone components is purchased on January 1, 2024, for $100,000. It is expected

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A machine that produces cellphone components is purchased on January 1, 2024, for $100,000. It is expected to have a useful life of four years and a residual value of $10,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end.


Required 

a. Calculate the amount of depreciation to be charged each year, using each of the following methods:
i. Straight-line 

ii. Units-of-production 

iii. Double-diminishing-balance 

b. Which method results in the highest depreciation expense:
i. During the first two years? 

ii. Over all four years?

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Related Book For  book-img-for-question

Understanding Financial Accounting

ISBN: 9781119715474

3rd Canadian Edition

Authors: Christopher D. Burnley

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