Exact Photo Service purchased a new color printer at the beginning of 2016 for $

Question

Exact Photo Service purchased a new color printer at the beginning of 2016 for $39,340. The printer is expected to have a four-year useful life and a $3,400 salvage value. The expected print production is estimated at $1,766,400 pages. Actual print production for the four years was as follows:

Exact Photo Service purchased a new color printer at the beginning of 2016 for $39,340. The printer is expected to have a four-year useful life and a $3,400 salvage value. The expected print production is estimated at $1,766,400 pages. Actual print production for the four years was as follows:

Exercise 8-13A Double-declining-balance and units-of-production depreciation: gain or loss on disposal [The following information applies to the questions displayed below.] Exact Photo Service purchased a new color printer at the beginning of 2016 for $39,340. The printer is expected to have a four-year useful life and a $3,400 salvage value. The expected print production is estimated at $1,766,400 pages. Actual print production for the four years was as follows: 2016 2017 2018 547,800 477,900 377,300 387,400 Total 1,790,400 The printer was sold at the end of 2019 for $3,850

Explanation / Answer

a) Double decline balance rate = 100/4*2 = 50%

b) Depreciation rate = (39340-3400)/1766400 = 0.020

c) Calculate gain or loss :

Depreciation expense 2016 39340*50% = 19670 2017 19670*50% = 9835 2018 9835*50% = 4918 2019 1517 Total 35940

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