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Near Company purchased a machine on January 1, 2017, by paying cash of $85,000.

Near Company purchased a machine on January 1, 2017, by paying cash of $85,000. The machine has an estimated useful life of five years, is expected to produce 30,000 units, and has an estimated residual value of $10,000.

 

 Required:

Calculate depreciation expense to the nearest whole dollar for each year of the machine's useful life under:

 a. Straight-line depreciation method.

 b. Double declining-balance method.

 c. If the machine was used to produce and sell 4,800 units in 2017, what would be the depreciation expense using the units-of-production method?  

 d. What is the book value of the machine after three years using the double declining-balance method?

 e. What is the book value of the machinery after three years using the straight-line method?

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