Reference no: EM133088423

Question - Computing Depreciation under Alternative Method Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $950,000. The estimated residual value was $50,000.

Assume that the estimated useful life was 5 years, and the estimated productive life of the machine was 300,000 units.

Actual annual production was as follows:

Year 1 - 50,000

Year 2 - 70,000

Year 3 - 40,000

Year 4 - 70,000

Year 5 - 70,000

Required -

(1) Calculate depreciation expense, accumulated depreciation, and the book value separately at the end of third year using Straight-line Method.

(2) Calculate depreciation expense, and the book value separately at the end of last year using Units-of-production Method.