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On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in...

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Accounting

On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $80,000, and its estimated useful life was four years or 1,000,000 cuttings, after which it could be sold for $5,000.

Calculate the depreciation expense for each year of the machine's useful life under each of the following methods:

a. Straight-line

b. Double-Declining balance

c. Units of Production. Assume annual production in cuttings of 200,000; 350,000; 260,000 and 190,000

Year of Useful Life Acquisition Cost Beginnin Book Vlaue Double decling rate Anndepreciation endvalue
year 1
year 2
year 3
year 4
total annual Depreiciation

Repat this chart for all depreciation methods of A, B and C

Assume the company uses the striaght line method and decides to sell the laser cutting machine at the end of the third year. Prepare the following journal entries:

a. Sale of the machine for cash at its book value

b. Sale of the machine for $23,000 cash

c. Sale of the machine for $24,000 cash

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