Schilig & Gray Industries purchased a new machine at the beginning of 2011 for \$9,500. The company expected the machine to last for four years and have a salvage value of \$500. The productive life of the machine was estimated to be 180,000 units. Yearly production was as follows: in 2011 it produced 50,000 units; in 2012 it produced 45,000 units; in 2013 it produced 30,000 units, and in 2014 it produced 55,000 units.

Requirements

1. Calculate the depreciation expense for each year of the four-year life of the machine using the following methods. (Round to the nearest dollar.)

a . Straight-line method

b. Double- declining balance method

c. Activity method using units

2. For each method, give the amount of accumulated depreciation that would be shown on the balance sheet at the end of the year.

3. Calculate the book value of the machine at the end of the year for each method.

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Sheet3 Sheet2 Sheet1 A B C D E G H Name Section F End of Problem Data Input Section: Estimated useful life Depreciation Expense Per Year Double Straight Declining Year Line Balance Helpful Hint: Use the following functions to calculate depreciation =SLN(cost,salvage,life) =DDB(cost,salvage,life,period) Cost per unit (cost-residual/units) Activity Method Output Section: Total units produced over life of machine Units produced Estimated salvage value Book Value of the Asset End of Year Straight Line Activity Method Double Declining Balance Problem 6-72A Cost of asset, January 1, 2011 Parts 1,2 Part 3. Amount Formula 1 Formula 2 Formula 3 Formula 4 Formula 5 Formula 6 Formula 7 Formula 8 Formula 9 Formula 10 Formula 11 Formula 12 Formula 13 Formula 14 Formula 15 Formula 16 Formula 17 Schillig & Gray Industries Reimers, Financial Accounting 3e 5.00 6.00 7.00 8.00 9.00 10.00 11.00 2011.00 12.00 2012.00 13.00 2013.00 14.00 2014.00 15.00 16.00 17.00 18.00 19.00 20.00 21.00 22.00 \$1.00 2011.00 23.00 \$2.00 2012.00 24.00 \$3.00 2013.00 25.00 \$4.00 2014.00 26.00 \$0.00 \$0.00 \$0.00 27.00 28.00 29.00 30.00 31.00 32.00 33.00 34.00 35.00 2011.00 36.00 2012.00 37.00 2013.00 38.00 2014.00 39.00 Sheet3 Sheet2 Sheet1 A B C D E G H Name Section F End of Problem Data Input Section: Estimated useful life Depreciation Expense Per Year Double Straight Declining Year Line Balance Helpful Hint: Use the following functions to calculate depreciation =SLN(cost,salvage,life) =DDB(cost,salvage,life,period) Cost per unit (cost-residual/units) Activity Method Output Section: Total units produced over life of machine Units produced Estimated salvage value Book Value of the Asset End of Year Straight Line Activity Method Double Declining Balance Problem 6-72A Cost of asset, January 1, 2011 Parts 1,2 Part 3. Amount Formula 1 Formula…