Blue Things Ltd has recently purchased a new machine for $230,000. It is expected to be useful for the business for 5 years, with an estimated residual value of $15,000. The machine is expected to be used for 10,000 hours over those 5 years with the following expected pattern of use:

Year Expected Hours of Use 1 1,500 2 1,750 3 2,000 4 2,250 5 2,500

Required:

(a) What is the annual depreciation expense for the machine using the straight-line method?

(b) Using the straight-line method, what is the closing balance of the accumulated depreciation account for the machine at the end of year 4?

(c) The diminishing-balance rate is 42.07%. Using the diminishing-balance method, what is the annual depreciation expense for the machine in the first year?

(d) The diminishing-balance rate is 42.07%. Using the diminishing-balance method, what is the annual depreciation expense for the machine in the second year?

(e) What is the rate of depreciation (per hour of use) for the machine using the units-of-production method?

(f) Using the units-of-production method, what is the annual depreciation expense for the machine in the third year?