On January 2 Gannon Co purchases and installs a new machine costing $312000 with a five-year life and an estimated $28000 salvage value Management estimates the machine will produce
On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life and an estimated $28,000 salvage value. Management estimates the machine will produce 1,136,000 units of product during its life. Actual production of units is as follows: year 1, 245,600; year 2, 230,400; year 3, 227,000; year 4, 232,600; and year 5, 211,200. The total number of units produced by the end of year 5 exceeds the original estimate—this difference was not predicted. (The machine must not 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.
Year Straight-Line Units-of-Production Double-Declining-Balance