Rottino Company purchased a new machine on October 1, 2015, at a cost of $150,000. The company
Question:
Rottino Company purchased a new machine on October 1, 2015, at a cost of $150,000. The company estimated that the machine will have a salvage value of $12,000.
The machine is expected to be used for 10,000 working hours during its 5-year life.
Instructions
Compute the depreciation expense under the following methods for the year indicated.
(a) Straight-line for 2015.
(b) Units-of-activity for 2015, assuming machine usage was 1,700 hours.
(c) Declining-balance using double the straight-line rate for 2015 and 2016.
Salvage ValueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Step by Step Answer:
a Straightline method Cost 150000 Less Salvage value 12000 Depreciable cost 138000 Useful ...View the full answer
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Related Book For 
Financial Accounting
ISBN: 9781118334324
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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