Weir Service Company purchased a copier on January 1, 2014, for $17,200 and paid

Question

Weir Service Company purchased a copier on January 1, 2014, for $17,200 and paid an additional $200 for delivery charges. The copier was estimated to have a life of four years or 1,000,000 copies. Salvage was estimated at $1,500. The copier produced 232,000 copies in 2014 and 246,000 copies in 2015.

Compute the amount of depreciation expense for the copier for calendar years 2014 and 2015, using Straight-line method.

Compute the amount of depreciation expense for the copier for calendar years 2014 and 2015, using Units-of-production method. (Round "Cost per unit" to 3 decimal places.)

Compute the amount of depreciation expense for the copier for calendar years 2014 and 2015, using Double-declining-balance method.

Weir Service Company purchased a copier on January 1, 2014, for $17,200 and paid an additional $200 for delivery charges. The copier was estimated to have a life of four years or 1,000,000 copies. Salvage was estimated at $1,500. The copier produced 232,000 copies in 2014 and 246,000 copies in 2015.

Explanation / Answer

Depreciation expense:

Workings:

a. Straight line method:

Dereciable amount = ( $17,200 + $200 - $ 1,500) = $ 15,900

Annual depreciation charge = $ 15,900 /4 = $ 3,975

b. Units of production method:

2014: 232,000 / 1000,000 x 15,900 = $ 3,688.80

2015: 246,000 / 1000,000 x 15,900 = $ 3,911.40

c. 2014: $ 17,400 x 50% = $ 8,700

2015 : $ 8,700 x 50% = $ 4,350

2014 2015 a. Straight-line method $ 3,975 $ 3,975 b. Units of production method $3,688.80 $ 3,911.40 c. Double declining method $8,700 $4,350

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