Question

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Exact Photo Service purchased a new color printer at the beginning of 2018 for $40,400. The printer is expected to have a four-year useful life and a $1,616 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows:

2018	545,500
2019	480,700
2020	378,800
2021	387,900
Total	1,792,900

The printer was sold at the end of 2021 for $1,916.

3. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods. (Amounts to be deducted should be indicated with minus sign.

4. double declining balance ????

5. units of production ???/

Answer 1

Double Declining Balance Method
Year	Book Value year start	Depreciation Rate	Depreciation Exp.	Acc. Dep	Book Value year-end
2018	$40,400	50.00%	$20,200	$20,200	$20,200
2019	$20,200	50.00%	$10,100	$30,300	$10,100
2020	$10,100	50.00%	$5,050	$35,350	$5,050
2021	$5,050	50.00%	$2,525	$37,875	$2,525
Units of Production Method
Year	Cost of Equipment	Accumulated Depreciation Beg. of Year	Book Value Beg. of Year	Depreciation Expense	Accumulated Depreciation End of Year	Book Value End of Year
2018	$40,400	$0	$40,400	$11,800	$11,800	$28,600
2019	$40,400	$11,800	$28,600	$10,399	$22,199	$18,201
2020	$40,400	$22,199	$18,201	$8,194	$30,393	$10,007
2021	$40,400	$30,393	$10,007	$8,391	$38,784	$1,616
				$38,784
Depreciation per units (40,400 - 1,616)/1,792,900 = 0.021632
Gain or loss from the sale of Assets
Double Declining Balance Method		-$609
Units of Production Method		$300