1. A high-speed multiple-bit drill press costing $960,000 has an estimated salva
ID: 2525138 • Letter: 1
Question
1. A high-speed multiple-bit drill press costing $960,000 has an estimated salvage value of $80,000 and a life of ten years was purchased on April 20 of the current year. What is the annual depreciation for each of the first two years under the following depreciation methods?
1. Double-declining-balance method:
a. Year one, $________.
b. Year two, $_________.
2. Units of production (activity) method (lifetime output is estimated at 110,000 units; the press produced 12,000 units in year one and 18,000 in year two):
a. Year one,________
b. Year two, ________
3. Straight-line depreciation method:
a. Year one, $_____.
b. Year two, $______
Explanation / Answer
1.
a. year 1 - 144000
b. year 2 - 163200
2.
a year 1 - 96000
b year 2 - 144000
3.
a. year 1 - 66000
b. year 2 - 88000
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