clean water co purchased a new water filter at the beginning of 2010 for 200 000 it 538680

Calculate and analyze depreciation under alternative methods. (LO2)

Clean Water Co. purchased a new water filter at the beginning of 2010 for $200,000. It is expected to last for 8 years and have a salvage value of $32,000. The estimated productive life of the machine is 200,000 units. Yearly production: in20l0-45,000 units; in 2011-29,000 units; in 2012-41,000 units; in 2013-22,000 units; in 2014-25,000 units: in 2015- 15,000 units ; in 201 6-1 6,000 units ; and in 2017 -7,000 units.

Required

a. Calculate the depreciation for each year using each of these depreciation methods:

1. Straight-line method

2. Activity method based on units

3. Double-declining balance method (round to the nearest dollar)

a. For each method, give the amount of accumulated depreciation that would be shown on the balance sheet at the end of each year.

b. Calculate the book value of the water filter at the end of each year for each method.