For your analysis you have been asked to compare methods bas

For your analysis, you have been asked to compare methods based on a machine that cost $176,000. The estimated useful life is 10 years, and the estimated residual value is $33,440. The machine has an estimated useful life in productive output of 216,000 units. Actual output was 28,000 in year 1 and 24,000 in year 2. Required: 1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) a. Double Declining Method. Use exact numbers given please.

Solution

Straight line method

Cost-salvage value/useful life of asset

Units of production method

Cost-salvage value/total no of units)*actual no of units

Double declining method

1/usefullife)*200%

1/5)*200%

40%

176000*40%70400

Balance=105600

105600*40%=42240

Balance=63360