Reference no: EM133102559

Question - Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows:

Year 1 390,000

Year 2 410,000

Year 3 420,000

Year 4 300,000

Total 1,520,000

The printer was sold at the end of Year 4 for $1,650.

Required -

a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.

b. Compute the depreciation expense for each of the four years, using units-of-production depreciation.

c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.