Depreciation methods
Response to the following problem:
On January 1, 2016, Canseco Plumbing Fixtures purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is expected to be $2,000. The company expects the machine to operate for 10,000 hours.
Calculate depreciation expense for 2016 and 2017 using each of the following depreciation methods:
(a) straight line,
(b) sum-of-the-years'-digits,
(c) double-declining balance, and
(d) units-of-production using machine hours.
The machine operated for 2,200 and 3,000 hours in 2016 and 2017, respectively.