Reference no: EM132924367

Question - Mace Company acquired equipment that cost $36,000, which will be depreciated on the assumption that the equipment will last six years and have a $2,400 residual value. Component parts are not significant and need not be recognized and depreciated separately. Several possible methods of depreciation are under consideration.

Show annual depreciation expense for the first two years in a schedule, assuming the following (show computations and round to the nearest dollar):

1. Declining-balance method, using a rate of 30%.

2. Productive-output method. Estimated output is a total of 210,000 units, of which 24,000 will be produced the first year; 36,000 in each of the next two years; 30,000 the fourth year; and 42,000 the fifth and sixth years.

3. Straight-line method.