Plastic Works Corporation bought a machine at the beginning of the year at a cost of $12,000. The estimated useful life was five years, and the residual value was $2,000. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production was: year 1, 3,000 units; year 2, 3,000 units; year 3, 2,000 units; year 4, 1,000 units; and year 5, 1,000 units.
| (b)Units of production: |
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Income Statement |
Balance Sheet |
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| Year |
Depreciation Expense |
Cost | Accumulated Depreciation | Book Value | ||||
| At acquisition | $ | |||||||
| 1 | $ | $ | $ | |||||
| 2 | ||||||||
| 3 | ||||||||
| 4 | ||||||||
| 5 | ||||||||
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| (c) | Double declining balance: |
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Income Statement |
Balance Sheet |
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| Year |
Depreciation Expense |
Cost | Accumulated Depreciation | Book Value | ||||
| At acquisition | $ | |||||||
| 1 | $ | $ | $ | |||||
| 2 | ||||||||
| 3 | ||||||||
| 4 | ||||||||
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