Question

The Mardova Clinic purchased a new surgical laser for $72,000 on January 1, 2020. The estimated salvage value is $8,000. The laser has a useful life of four years and the clinic expects to use it 8,000 hours. It was used 2,600 hours in year 1; 2,400 hours in year 2; 2,200 hours in year 3; and 2,000 hours in year 4.

Compute the annual depreciation expense, accumulated depreciation, and book value for each of the four years under each of the following four methods and answer the questions in the response template below:

A) Straight-line  

B) Units of Activity  

C) 150% Declining Balance

D) Sum of the Years Digits

A) Straight-line  

1) Year 1 - Depreciation expense $

2) Year 2 - Accumulated depreciation $

3) Year 3 - Book value $

4) Year 4 - Depreciation expense $

B) Units of Activity  

5) Year 1 - Depreciation expense $

6) Year 2 - Accumulated depreciation $

7) Year 3 - Book value $

8) Year 4 - Depreciation expense $

C) 150% Declining Balance

9) Year 1 - Depreciation expense $

10) Year 2 - Accumulated depreciation $

11) Year 3 - Book value $

12) Year 4 - Depreciation expense $

D) Sum of the Years Digits

13) Year 1 - Depreciation expense $

14) Year 2 - Accumulated depreciation $

15) Year 3 - Book value $

16) Year 4 - Depreciation expense $

Answer 1