Question
ABC Company purchases a factory machine at a cost of $20,000 on January 1, 2008. Transportation cost was $500 and installation cost was $500. The
ABC Company purchases a factory machine at a cost of $20,000 on January 1, 2008. Transportation cost was $500 and installation cost was $500. The machine is expected to have a salvage value of $3,000 at the end of its 4th year useful life. During its useful life, the machine is expected to be used for 1,80,000 hours. Actual annual hourly usages were: 50,000 in 2008; 70,000 in 2009; 35,000 in 2010; and 25,000 in 2011. Required: Prepare depreciation schedules under the following methods: i) Units of Activity Method ii) Straight Line Method iii) Sum of the year Digit Method iv) Reducing Balance Method
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