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mae
Member since:
March 16, 2013
Total points:
96 (Level 1)
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# Accounting questions?

A machine costing \$490,000 with a four-year life and an estimated \$30,000 salvage value is installed in Calhoon Company’s factory on January 1. The factory manager estimates the machine will produce 575,000 units of product during its life. It actually produces the following units: year 1, 157,000; year 2, 143,000; year 3, 140,000; and year 4, 138,000. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)

Required:

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
• 9 months ago
by Anna
Member since:
August 13, 2006
Total points:
2,475 (Level 3)
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## Best Answer - Chosen by Voters

Straight line:

490,000/4 = 122,500 for each year

Units produced:

490,000/575,000= .85 per unit
157,000 * .85 = 133,450
143,000 * .85 = 121,550
140,000 * .85 = 119,000
REMAINDER = 116,000

Total depreciation is 490,000 for each method no matter what because the point is that you are supposed to depreciate the entire amount, just in different ways.
• Edited 9 months ago