Depreciation Methods On January 2,2015. Roth, Inc. purchased a laser cutting mac

Question

Depreciation Methods On January 2,2015. Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machin ne cost $90.000, and its estimated useful life was four years or 850.000 cuttings, after which it could be sold for $5.000 Required a. Calculate each year's depreciation expense for the machine's useful life under each of the following depreciation methods tround all answers to the nearest dollar): 1. Straight-line. 2. Double-declining balance. 3. Units-of-production. (Assume annual production in cuttings of 200.,00: 350.000: 260.000: and 40.000.) 1. Straight-Line Depreciation Year Expense 2015 2016 2017 2018

Explanation / Answer

a) 1 Year Depreciation Expenses Formula used 2015 $              21,250 =(90000-5000)/4 2016 $              21,250 =(90000-5000)/4 2017 $              21,250 =(90000-5000)/4 2018 $              21,250 =(90000-5000)/4 2 Year Depreciation Expenses Formula used 2015 $              45,000 =90000*50% 2016 $              22,500 =(90000-45000)*50% 2017 $              11,250 =(90000-45000-22500)*50% 2018 $                 5,625 =(90000-45000-22500-11250)*50% 2019 $                    625 =5625-5000 3 Year Depreciation Expenses 2015 $              20,000 =85000/850000*200000 2016 $              35,000 =85000/850000*350000 2017 $              26,000 =85000/850000*260000 2018 $                 4,000 =85000/850000*40000 b) 1 Year Depreciation Expenses 2015 $              10,625 2016 $              21,250 2017 $              21,250 2018 $              21,250 2019 $              10,625 2 Year Depreciation Expenses 2015 $              22,500 2016 $              33,750 2017 $              16,875 2018 $                 8,438 2019 $                 3,438

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