Double-declining-balance and units-of-production depreciation: gain or loss on d

Question

Double-declining-balance and units-of-production depreciation: gain or loss on disposal

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Graphics Service Co. purchased a new color copier at the beginning of 2014 for $35,150. The copier is expected to have a five-year useful life and a $6,270 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy production for the five years was as follows:

The copier was sold at the end of 2018 for $6,470.

9 Part a

Compute the depreciation expense for each of the five years, using double-declining-balance depreciation. (Round your intermediate calculations and final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.)

Double-Declining-Balance

2014

2015

2016

2017

2018

10 Part b

Compute the depreciation expense for each of the five years, using units-of-production depreciation.(Round intermediate calculations to 3 decimal places. Round your final answers to nearest dollar amount.)

UNITS-OF-PRODUCTION

2014

2015

2016

2017

2018

11 Part c

Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.

DEPRECIATION METHODS AMOUNT EFFECT

Double-declining balance __________ ____________

Units-of-Production ___________ ____________

Graphics Service Co. purchased a new color copier at the beginning of 2014 for $35,150. The copier is expected to have a five-year useful life and a $6,270 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy production for the five years was as follows:

Explanation / Answer

(Cost -Accum. Depr.) x (2 x SL Rate) = Depr. Exp. Per Year

SL Rate = 1 ÷ 5 = .20

2008: ($35,100 -$0) x (2 x .20) = $14040

2009: ($35,100-$14040) x (2 x .20) = 8424

2010: ($35100 -$22464) x (2 x .20) = 5054

2011: ($35100 - $27528) x (2 x .20) = 3029 3039

2012: ($35100 - $30557) x (2 x .20) = 1817 -0-*

Total Accumulated Depreciation$30557

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