peps co purchased a new machine at the beginning of 2006 for 6 400 the company expec 538670

Calculate and analyze depreciation under alternative methods. (LO 2)

Peps Co. purchased a new machine at the beginning of 2006 for $6,400. The company expects the machine to last for 5 years and have a salvage value of $400. The estimated productive life of the machine is 100,000 units. Yearly production: in 2006-28,000 units; in 2008-16,000 units; in 2OO9-14,000 units; in 2010-20,000 units.

Required

a. Calculate the depreciation expense for each year of the 5-year life of the machine using

1. Straight-line method

2. Double-declining balance method (Round to the nearest dollar.)

3. Activity method using units

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

c. Calculate the book value of the machine at the end of each year for each method.