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A production machine which cost $3,500,000 is acquired on August 1, 2020. Its estimated residual value is $500,000 and its expected life is 8 years
A production machine which cost $3,500,000 is acquired on August 1, 2020. Its estimated residual value is $500,000 and its expected life is 8 years or about 100,000 operating hours. During 2020, the machine was used to produce products for 5,000 operating hours during 2016 and 9,600 operating hours during 2021.
Calculate depreciation expense for 2020 and 2021 by each of the following methods:
(a) Straight-line method
(b) Double-declining balance method
(c) Units-of-output method
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