Double declining balance and units of production depreciation: gain or loss on disposal
Copy Service Co. purchased a new color copier at the beginning of 2010 for $42,000. The copier is expected to have a five year useful life and a $6,000 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy production for the five years was as follows.
|
2010 |
550,000 |
|
2011 |
480,000 |
|
2012 |
380,000 |
|
2013 |
390,000 |
|
2014 |
240,000 |
|
Total |
2,040,000 |
The copier was sold at the end of 2014 for $5,200.
Required
a. Compute the depreciation expense for each of the five years, using double declining balance depreciation.
b. Compute the depreciation expense for each of the five years, using units of production depreciation. (Round cost per unit to three decimal places.)
c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.