Computing Depreciation and Book value for Two Years Using Alternative Depreciation Methods and Interpreting the Impact on Cash Flows
Daisey Company bought a machine for $66,000 cash. The estimated useful life was four years, and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is120,000. Units actually produced were 43,000 in year 1 and 45,000 years 2.
Required:
1. Determine the appropriate amounts to complete the schedule. Show computations andround to the nearest dollar.
Depreciation Expense for Net Book Value at the End
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Method of Depreciation Year 1 Year 2 Year 1 Year 2
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Straight-line
Units-of-production
Double-declining- balance
2. Which method would result in the lowest EPS for year 1? For year 2?
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