Question

Directions: Calculate Depreciation Expense for each of 3 years using 3 different methods using the following information. Report your final answers, use formulas and/or show all work for each calculation. Round to the whole number.
Multi-use printer acquired on the first day of the Year One for $10,000
The estimated useful life is 3 years or 10,000 hours
The residual salvage value is estimated at $1500
During Year One, the copy machine was used for 3300 hours
During Year Two, the copy machine was used for 2800 hours
During Year Three, the copy machine was used for 3900 hours
						Year 1	Year 2	Year 3	Total
Straight Line Depreciation Method
Units of Production Depreciation Method
Double Declining Balance Depreciation Method

Straight Line Calculations:

Units of Production Calculations:

Double Decline Balance Calculations:

Answer 1

			Year 1	Year 2	Year 3	Total
		Straight Line Depreciation Method	2,833	2,833	2,833	8,500
		Units of Production Depreciation Method	2,805	2,380	3,315	8,500
		Double Declining Balance Depreciation Method	6,666	2,222	734	9,622
		Straight Line Depreciation Method:-
		Depreciation per year= (Cost - Salvage value) / Useful life
		=	(10,000-1,500)/3
		=	2,833
		Units of Production Depreciation Method:-
		Depreciation = ( Number of Units Produced/Life in Number of Units) * (Cost -Salvage value)
		Depreciation for year 1 = (3,300/10,000)*(10,000-1,500) = 2,805
		Depreciation for year 2 = (2,800/10,000)*(10,000-1,500) = 2,380
		Depreciation for year 3 = (3,900/10,000)*(10,000-1,500) = 3,315
		Double Declining Balance Depreciation Method:-
		SLM Rate =(Depreciation/Depreciable value)
		= (2,833.33/8,500) = 33.33%
		Depreciable value = (Cost - Salvage value) = (10,000-1,500) = 8,500
		Under double declining method, company would depreciate (2*33.33%) of purchase value
		Depreciation for year 1 = (10,000*2*33.33%) = 6,666
		Depreciation for year 2 = [(10,000-6,666)*2*33.33%] = 2,222
		Depreciation for year 3 = [(10,000-6,666-2,222)*2*33.33%] = 1,112