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Question - Zeigler manufacturing company purchase a robot for 720,000 at the beginning of year 1. The robot has an estimated useful life of four years and estimated residual value of 60,000. The robot, which should last 20,000 hours, was operated 6,000 hours in year 1; 8,000 hours in year 2; 4,000 hours in year 3; and 2,000 hours in year 4.
Required -
1. Compute the annual depreciation and carrying value for the robot for each year assuming the following depreciation methods 1. Straight line 2. Production and 3. Double declining method.
2. If the robot is sold for $750,000 after year 2, what would be the amount of gain or loss under each method?
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