On January 2, Gillette Co. purchases and installs a new machine costing $36,000 with a five-year life and an estimated $33,000 salvage value. Management estimates the machine will produce 2,180,000 units of product during its life. Actual production of units is as follows: year 1: 425,000; year 2: 452,000; year 3: 445,000; year 4: 438,000; and year 5: 441,000. The total number of units produced by the end of year 5 exceeds the original estimate- this difference was not predicted.
Prepare a schedule with the following column headings(year,straight line,Units of production,double declining balance) and compute depreciation for each year(and total all years combined) for the machine under each depreciation method.