Computing depreciation and book value

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Reference no: EM13492365

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

Method of Depreciation                      Year 1                Year 2                                  Year 1            Year 2

 

Straight-line

Units-of-production

Double-declining- balance

2. Which method would result in the lowest EPS for year 1? For year 2?

Reference no: EM13492365

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