Banko Inc. manufactures sporting goods. The following information applies to a m

Question

Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, 2016:

Determine the amount of depreciation expense for 2016 and 2017 using straight-line method.

Determine the amount of depreciation expense for 2016 and 2017 using double-declining-balance method.

Determine the amount of depreciation expense for 2016 and 2017 using units of production method.

Determine the amount of depreciation expense for 2016 and 2017 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.)

Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, 2016:

Explanation / Answer

A) Straight line Depreciation   = $68,200 - 5000/5 = $12,640

For each year same depreciation

B) Double declining method = 1/5 * 2 = 40%

2016 depreciation -=68,200 @40% = $27,280

2017   Depreciation = (68,200 - $27,280) 40% = $16,368

c) Unit production method

63,200/158000 = .4

2016   54,000 * .4   = $21,600

2017   56,000 * .4   = $22,400

d) MACRS

2016   = 68,700 @14.29% = $9745.78

2017   - 68,200 @ 24.49% = $16,702.18

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