Jones Manufacturing Corporation depreciates its machinery using the straight-line method over a 10 -year life with zero estimated salvage value. A full year's depreciation is taken in the year of acquisition and none in the year of disposal. Acquisitions, which took place evenly over the appropriate years, were as follows: \(1977, \$ 500,000 ; 1978, \$ 100,000\); 1979, \(\$ 200,000\). An index of the average general price level during 1977 was 120, during 1978 was 160, and during 1979 was 180. The general price index on December 31, 1979, is 200 .

a Determine the amount of depreciation expense for 1979 and the book value of the machinery on December 31, 1979, using the acquisition-cost valuation method as conventionally reported.

b Repeat part

a, using the acquisition-cost valuation method restated for general price level changes. Round conversion factors used to two decimal places (for example, \(200 / 120=1.67\) ).