Sum-of-the-years-digits method


Question: A high-speed multiple-bit drill press costing $300,000 has an estimated salvage value of $30,000 and a life of ten years. What is the annual depreciation FOR THE SECOND YEAR OF USE under the following depreciation methods?

1. Double-declining-balance method:

2. Units of production (activity) method (lifetime output is estimated at 110,000 units; the press produced 12,000 units in year one and 18,000 in year two):

3. Sum-of-the-years'-digits method:

4. Straight-line depreciation method:

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Accounting Basics: Sum-of-the-years-digits method
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