At the beginning of the year, Labenski Inc. bought three used machines from Moore Corporation. The machines immediately were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.

By the end of the first year, each machine had been operating 7,000 hours.

Required:
1. Compute the cost of each machine.
2. Give the entry to record depreciation expense at the end of year 1, assuming thefollowing:

Transcribed Image Text:

ESTIMATES Machine Life Residual Value Depreciation Method 8 years 33,000 hours 5 years $1,000 2.000 1.400 Straight-line Units-of-production Double-declining-balance