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Straight Line, Unit of Production and Double Declining

Bob Xerox Company purchased a copier on January 1, 2013, for $22200 and paid an additional $200 for delivery charges. The copier was estimated to have a life of five years or 500,000 copies. Salvage was estimated at $2400. The copier produced 120000 copies in 2013 and 140,000 copies in 2014 .Compute the amount of depreciation expense for the copier for calendar years 2013 and 2014 using these methods:

a. straight-line
b. units-of-production
c. double-declining-balance

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1 Calculation of Rate of depreciation and annual depreciation under Straight line Method

Cost of Machine $22,400
Estimated Residual value $2,400
Formula for Annual Depreciation Depreciation = cost-salvage value
Estimated life of an asset in years

Calculation of annual Depreciation 22400-2400
5 years
Annual depreciation $4,000
Rate of Depreciation 100%/Useful life
100/5=20%
Depreciation for ...

Solution Summary

The solution contains step by step calculation of depreciation under a Straight line method, b Units of production and c Double declining method with clear working and formulas.It also includes Table showing Amount of depreciation Expense recognized for 5 years using double declining balance method.At the end an explanatory note covering concepts of calculating depreciation under these three methods is provided.

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