Question

Primo Industries purchased a new printing press at the begining of 2018 for $76,000. The printer is expected to have a 5 year useful life and a $6,000 salvage value. The expected print production is estimated at $1,400,000 pages as follows:

  

2018	$280,000
2019	320,000
2020	350,000
2021	300,000
222	50,000
TOTAL	$1,400,000

REQUIRED:

Calculate the depreciation for 2018 and 2019 using the Straight Line, Units of Production and Double Declining Balance methods. Please show work.

Answer 1

Depreciation for 2018 and 2019 using the Straight Line, Units of Production and Double Declining Balance methods is as shown below:

Depreciation Schedule
Straight Line Method
Bus 1	Cost	Annual Dep.		Acc. Dep.	Carrying value
01-01-2018	76,000		-	-	76,000
2018	76,000	(76,000-6,000)/5	14,000	14000	62,000
2019	76,000	(76,000-6,000)/5	14,000	28000	48,000
Depreciation Schedule
Double-Declining Balance method
Bus 2	Cost	Annual Dep.		Acc. Dep.	Carrying value
01-01-2018	76,000	-	-	-	76,000
2018	76,000	(40% of $76,000)	30,400	30,400	45,600
2019	76,000	(40% of 45,600)	18,240	48,640	27,360
Depreciation Schedule
Units of production
Bus 3	Cost	Annual Dep.		Acc. Dep.	Carrying value
01-01-2018	76,000	-	-	-	76,000
2018	76,000	76,000*280,000/1,400,000	15,200	15200	60,800
2019	76,000	76,000*320,000/1,400,000	17,371	32571	43,429