Solar Innovations Corporation bought a machine at the beginning of the year at a

Question

Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $29,000. The estimated useful life was five years and the residual value was $3,500. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production for year 1, 2,000 units; year 2, 3,000 units; year 3, 2,000 units; year 4, 2,000 units; and year 5, 1,000 units.

Complete a depreciation schedule for each of the alternative methods: straight-line, units-of-production, double declining balance.

Complete a depreciation schedule for each of the alternative methods: straight-line, units-of-production, double declining balance.

The table for each method has columns for Depreciation Expense, Cost, Accumulated Depreciation, and Book Value for each year (1-5).

Explanation / Answer

a) Straight line :

:b) Unit of production

3500

c) Double decline

Income statement Balance sheet Year Depreciation expense Cost Accumlated depreciation Book value At acquisition 29000 1 5100 29000 5100 23900 2 5100 29000 10200 18800 3 5100 29000 15300 13700 4 5100 39000 20400 18600 5 5100 29000 25500 3500

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