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.

Required

1. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation. (Do not round your intermediate calculations. Round final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.)

Answer 1

• Working

A	Cost	$            40,400.00
B	Residual Value	$              1,616.00
C=A - B	Depreciable base	$            38,784.00
D	Life [in years]	4
E=C/D	Annual SLM depreciation	$              9,696.00
F=E/C	SLM Rate	25.00%
G=F x 2	DDB Rate	50.00%

Year	Beginning Book Value	Depreciation rate	Depreciation expense	Ending Book Value	Accumulated Depreciation
1	$              40,400.00	50.00%	$         20,200.00	$             20,200.00	$        20,200.00
2	$              20,200.00	50.00%	$         10,100.00	$             10,100.00	$        30,300.00
3	$              10,100.00	50.00%	$            5,050.00	$                5,050.00	$        35,350.00
4	$                5,050.00		$ 3,434.00	$                1616.00	$        38,784.00

• Requirement [a]

Year	Depreciation expense
2018	$         20,200.00
2019	$         10,100.00
2020	$            5,050.00
2021	$ 3,434.00