Units-of-Production Method ? machine is purchased January 1 at a cost of $59,000

Question

Units-of-Production Method ? machine is purchased January 1 at a cost of $59,000 It is expected to produce 130 000 units and have a savage value of $300 Units produced are as follows: at the end of ts use i life. fe Year 1 10,000 Year 2 8,000 Year 3 12,000 Year 4 16,000 Year 5 11,000 Required: Prepare a schedule showing depreciation for each year and the book value at the end of each year using the units-of-production method (round calculations to two decimal places). Units-of-Production Method Year ning Book Value Annual Depreciation Ending Book Value

Explanation / Answer

Depeciation schedule.

Note 1st year book value is taken after deduction salvage value.

Year Beginning Book Value Annual Depreciation Ending Book Value 1 $ 56,000.00 $     4,307.69 $ 51,692.31 2 $ 51,692.31 $     3,181.07 $ 48,511.24 3 $ 48,511.24 $     4,477.96 $ 44,033.28 4 $ 44,033.28 $     5,419.48 $ 38,613.80 5 $ 38,613.80 $     3,267.32 $ 35,346.48

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