Sketches Inc. purchased a machine on January 1, 2016. The cost of the machine wa

Question

Sketches Inc. purchased a machine on January 1, 2016. The cost of the machine was $27,500. Its estimated residual value was $8,500 at the end of an estimated 5-year life. The company expects to produce a total of 10,000 units. The company produced 1,050 units in 2016 and 1,500 units in 2017. Required: a. Calculate depreciation expense for 2016 and 2017 using the straight-line method. 2016 2017 Depreciation Expense Calculate the depreciation expense for 2016 and 2017 using the units-of-production method. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar.) 2016 2017 Depreciation Expense This is a numeric cell, so please enter numbers C. Calculate depreciation expense for 2016 through 2020 using the double-declining balance method. (Round your final answer to nearest dollar value.) 2016 2018 2019 2020 Depreciation Expense

Explanation / Answer

a)

b)

Straight line Method Cost of machine $ 27,500 Less: residual value $    8,500 Depreciable value $ 19,000 Depreciation ($19,000 / 5) $    3,800 Depreciation expense for 2016 $    3,800 Depreciation expense for 2017 $    3,800

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