1. The new wood cutting machine will cost $420,000 and its depreciation is over 10 years...

1. The new wood cutting machine will cost $420,000 and its depreciation is over 10 years to zero using the straight-line method. At the end of 5 years, the estimated value of the wood cutting machine is $50,000. How mush is the first year to fifth year depreciation?

2. The total cost of the required 3D printers is $750,000 and its depreciation is over 15 years to zero using the straight-line method. At the end of 5 years, the estimated value of the 3D printers is $300,000. How mush is the first year and fifth year depreciation?

Expert Solution

Question 1

Answer--------------$210,000 and $42,000 per year

Working

Straight line Method
A	Cost	$ 420,000
B	Residual Value	$ 0
C=A - B	Depreciable base	$ 420,000
D	Life [in years left ]	10
E=C/D	Annual SLM depreciation	$ 42,000

.

Depreciation schedule-Straight line method
Year	Book Value	Depreciation expense	Accumulated Depreciation	Ending Book Value
1	$ 420,000.00	$ 42,000.00	$ 42,000.00	$ 378,000.00
2	$ 378,000.00	$ 42,000.00	$ 84,000.00	$ 336,000.00
3	$ 336,000.00	$ 42,000.00	$ 126,000.00	$ 294,000.00
4	$ 294,000.00	$ 42,000.00	$ 168,000.00	$ 252,000.00
5	$ 252,000.00	$ 42,000.00	$ 210,000.00	$ 210,000.00

.

Question 2.

Answer--------------Depreciation of first year = $50000 and fifth year = $50000.

Working

Straight line Method
A	Cost	$ 750,000
B	Residual Value	$ 0
C=A - B	Depreciable base	$ 750,000
D	Life [in years left ]	15
E=C/D	Annual SLM depreciation	$ 50,000

.

Depreciation schedule-Straight line method
Year	Book Value	Depreciation expense	Accumulated Depreciation	Ending Book Value
1	$ 750,000.00	$ 50,000.00	$ 50,000.00	$ 700,000.00
2	$ 700,000.00	$ 50,000.00	$ 100,000.00	$ 650,000.00
3	$ 650,000.00	$ 50,000.00	$ 150,000.00	$ 600,000.00
4	$ 600,000.00	$ 50,000.00	$ 200,000.00	$ 550,000.00
5	$ 550,000.00	$ 50,000.00	$ 250,000.00	$ 500,000.00

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