Computing Depreciation under Alternative Methods
Response to the following problem:
Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $9,000. The estimated useful life was four years, and the residual value was $1,000. Assume that the estimated productive life of the machine was 16,000 hours. Actual annual usage was 5,500 hours in year 1; 3,800 hours in year 2; 3,200 hours in year 3; and 3,500 hours in year 4.
Required:
Complete a separate depreciation schedule for each of the alternative methods. Round your answers to the nearest dollar.
a. Straight-line.
b. Units-of-production (use four decimal places for the per unit output factor).
c. Double-declining-balance.