Depreciation methods

Rockport corporation purchased a new piece of equipment on

January 1st of this year. Other information about the machine is
listed in the table below. Note that the actual units produced
exceed the estimate, but the machine cannot be depreciated
below its salvage value

Machine Cost 312,500

Useful life 5
Salvage Value 22,000
Total estimated units 514,000
Actual units year 1 124,500
Actual units year 2 127,300
Actual units year 3 119,750
Actual units year 4 131,250

1 Calculate the Straight line Depreciation

Machine Cost 312,500

Salvage Value 22,000
Depreciable Basis 290,500
Useful life 5
Deprecation per year 58,100

2 Calculate Depreciation using Units of Production

Machine Cost 312,500

Salvage Value 22,000
Depreciable Basis 290,500
Total estimated units 514,000
Depreciation per unit 0.57

Depreciation Annual
Year Units per unit depreciation
1 124,500 0.57 70,965
2 127,300 0.57 72,561
3 119,750 0.57 68,258
4 131,250 0.57 74,813
Total Depreciation 286,597
 3 Calculate Depreciation using Double Declining Balance

Straight line deprecation rate

2
double declining balance rate

Depreciation Accumlated
Year Begining of year Book value rate Expense Deprecation
1
2
3
4