On Jan 1, A company purchased a machine for 80,000. The estimated life of the machine was 8 years and the estimated salvage value was $6,000. The machine had an estimated useful life in productive output of 110,000 units. Actuals output for the first two years was: yr 1, 15,000 units and yr 2, 13,000 units.
Compute the amount of depreciation for the first year for each following method: Straight line, Units-of Prodcution,Sum-of-year-units, and double-declining-balance ?
What was the book value of the machine at the end of the first year, assuming straight-line method was used ?
If the machine is sold at the end of 5th year for 28,500, how much should the company report as a gain or loss(assuming styraight-line) ?