Exercise 7-48
Depreciation Methods
Berkshire Corporation purchased a copying machine for $8,700 on January 1, 2019. The machine’s residual value was $425 and its expected life was 5 years or 2,000,000 copies. Actual usage was 480,000 copies in the first year and 400,000 in the second year.
Required:
1. Compute depreciation expense for 2019 and 2020 using the:
a. Straight-line method.
Depreciation expense $ per year
b. Double-declining-balance method.
| Depreciation Expense | |
| 2019 | $ |
| 2020 | $ |
c. Units-of-production method. (Do not round intermediate calculations.)
| Depreciation Expense | |
| 2019 | $ |
| 2020 | $ |
2. For each depreciation method, what is the book value of the machine at the end of 2019? At the end of 2020?
| 2019 | 2020 | ||
| a. | Straight-line method | $ | $ |
| b. | Double-declining-balance method | $ | $ |
| c. | Units-of-production method | $ | $ |
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