Machado Inc. purchased a new robotic drill for its assembly line operation. The total cost of the
Question:
Machado Inc. purchased a new robotic drill for its assembly line operation. The total cost of the asset was $125,000, including shipping, installation, and testing. The asset is expected to have a useful life of five years and a residual value of $10,000. The total service life, expressed in hours of operation, is 10,000 hours. The total output the machine is expected to produce over its life is 1,000,000 units.
The asset was purchased on January 1, 2020, and it is now December 31, 2021. In 2021, the asset was used for 2,150 hours and it produced 207,000 units.
Required: Calculate the 2021 depreciation charge using the following methods:
a. Straight-line
b. Activity, based on units of input
c. Activity, based on units of production
d. Double declining balance
Step by Step Answer:
Intermediate Financial Accounting Volume 1
ISBN: 9781539980674
1st Edition
Authors: Glenn Arnold, Suzanne Kyle, Lyryx Learning