Reference no: EM132788546

On January 2, Gannon Co. purchases and installs a new machine costing 5312.000 with a five-year life and an estimated 528,000 salvage value. Management estimates the machine will produce 1,136,000 units of product during its life. Actual production of units is as follows:

year 1: 245.600;

year 2: 230.400;

year 3: 227,000;

year 4: 232,600; and

year 5: 211,200.

The total number of units produced by the end of year 5 exceeds the original estimate - this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)

Problem 1: Compute depreciation for each year (and total depreciation for all years combined) for the machine under straight-line and units-of-production depreciation methods. You will use the form for Problem 9 and then