Solar Innovations Corporation bought a machine at the beginning of the year at a

Question

Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $26,000. The estimated useful life was five years and the residual value was $3,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annual production for year 1, 4,500 units; year 2, 5,500 units; year 3, 4,500 units; year 4, 4,500 units; and year 5, 1,000 units.

Complete a depreciation schedule for each of the alternative methods. (Do not round intermediate calculations.)

Units-of-production.

1.

Complete a depreciation schedule for each of the alternative methods. (Do not round intermediate calculations.)

c. Double-declining-balance. b.

Units-of-production.

a. Straight-line

Explanation / Answer

Complete a depreciation schedule for each of the alternative methods.

a) Straight line = (26000-3000/5) = 4600 per year

b) Unit of production method = (26000-3000/20000) = 1.15 per unit

c) Double decline balance = 100/5 = 20%*2 = 40%

Year Depreciation expense 1 4600 2 4600 3 4600 4 4600 5 4600

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