A machine costing $214,000 with a tour-year life and an estimated $16,000 salvag

Question

A machine costing $214,000 with a tour-year life and an estimated $16,000 salvage value is installed in Luther Company's tactory on January 1. The factory manager estimates the machine wil produce 495,000 units of product during its life. It actually produces the following units 121.800 in 1st year 123,800 in 2nd year, 120,200 in 3rd year, 139,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimateri this difference was not predicted (Tle machine must not be depreciated below its estimated salvage value,) Required: Compute depreciation for each year (and total depreciation of all years combinea) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollär.) tra on Depreciation Expense Year Total

Explanation / Answer

Straight line Depreciation Year Depreciation expense 1 49500 =(214000-16000)/4 2 49500 3 49500 4 49500 Total 198000

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