Design Service Co. purchased a new color copier at the beginning of 2016 for $47,000. The copier is expected to have a five-year useful life and a $7,000 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy production for the five years was as follows:
2016 …… 560,000
2017 …… 490,000
2018 ……. 430,000
2019 ……. 350,000
2020 …… 210,000
Total …… 2,040,000
The copier was sold at the end of 2020 for $7,600.
a. Compute the depreciation expense for each of the five years, using double-declining-balance depreciation.
b. Compute the depreciation expense for each of the five 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.