Exact Photo Service purchased a new color printer at the beginning of 2018 for $

Question

Exact Photo Service purchased a new color printer at the beginning of 2018 for $42,800. The printer is expected to have a four-year useful life and a $1,712 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows:

The printer was sold at the end of 2021 for $2,112.

Compute the depreciation expense for each of the four years, using double-declining-balance depreciation. (Do not round your intermediate calculations. Round final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.)

2018 545,300 2019 479,400 2020 383,200 2021 385,600 Total 1,793,500

Explanation / Answer

Depreciation under Double declining balance method = (cost - accumulated depreciation) / useful life * 2

Accumulated depreciation in 2018 = $0

Depreciation expense in 2018 = ($42,800 - 0) / 4 * 2 = $21,400

Accumulated depreciation in 2019 = $21,400

Depreciation expense in 2019 = ($42,800-$21,400) / 4 * 2 = $10,700

Accumulated depreciation in 2020 = $21,400+$10,700 = $32,100

Depreciation expense in 2020 = ($42,800-$32,100) / 4 * 2 = $5,350

Accumulated depreciation in 2021 = $32,100 + $5,350 = $37,450

Depreciation expense in 2021 = ($42,800-$37,450) / 4 * 2 = $2,675

Double declining balance 2018 $21,400 2019 $10,700 2020 $5,350 2021 $2,675

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