A high-speed multiple-bit drill press costing $1,080,000 has an estimated salvag

Question

A high-speed multiple-bit drill press costing $1,080,000 has an estimated salvage value of $90,000 and a life of ten years. What is the annual depreciation for each of the first two full years under the following depreciation methods?
Double-declining-balance method:
Year one, $______________.
Year two, $______________.

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):
Year one, $______________.
Year two, $______________.

Sum-of-the-years'-digits method:
Year one, $______________.
Year two, $______________.

Straight-line depreciation method:

Year one, $______________.
b.Year two, $______________.

Explanation / Answer

Double-declining-balance method: Year one 216000 =1080000*20% Year two 172800 =(1080000-216000)*20% Units of production (activity): Year one 108000 =(1080000-90000)/110000*12000 Year two 162000 =(1080000-90000)/110000*18000 Sum-of-the-years'-digits method: Year one 180000 =(1080000-90000)/55*10 Year two 162000 =(1080000-90000)/55*9 Straight-line depreciation method: Year one 99000 =(1080000-90000)/10 Year two 99000 =(1080000-90000)/10

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