Clearcopy, a printing company, acquired a new press on January 1. The press cost $171,600 and had an expected life of 8 years or 4,500,000 pages and an expected residual value of $15,000. Clearcopy printed 679,200 pages during the year. Do not round intermediate calculations. If required, round your answers to the nearest whole dollar. Required: What is the book value of the machine at the end of year under each method? Straight-line method .....................................$ Double-declining-balance method ................$ Units-of-production method ...........................$
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Clearcopy, a printing company, acquired a new press on January 1. The press cost $171,600 and had an expected life of 8 years or 4,500,000 pages and an expected residual value of $15,000. Clearcopy printed 679,200 pages during the year. Do not round intermediate calculations. If required, round your answers to the nearest whole dollar.
Required:
- What is the book value of the machine at the end of year under each method?
- Straight-line method .....................................$
- Double-declining-balance method ................$
- Units-of-production method ...........................$
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