Boscan Corporation purchased machinery on January 1, 2024, at a cost of $85,000. The estimated useful life of the machinery is 5 years, with an estimated salvage value at the end of that period of $10,000. The company is considering different depreciation methods that could be used for financial reporting purposes. Calculate depreciation expense for the first two years under each method.

straight-line method/double declining balance

activity based method info:

Assume the machine hours for each year will be the following: 1 15,000 2 30,000 3 20,000 4 25,000 5 10,000 100,000

1. What is the depreciation expense for YEAR 2 using the straight-line method of depreciation?

2. What is the depreciation expense for YEAR 1 using the double-declining method of depreciation?

3. What is the accumulated depreciation at the end of YEAR 2 using the double-declining method of depreciation?

4. From the Boscan example, what is the depreciation rate per machine hour using the Activity- based method of depreciation?

5. What is the BOOK VALUE of the machine after depreciation expense has been calculated for YEAR 2 using the activity-based method of depreciation?

6. What is the accumulated depreciation at the end of YEAR 2 using the activity-based method of depreciation?

7. What is the BOOK VALUE of the machine after depreciation expense has been calculated for YEAR 2 using the straight-line method of depreciation?

8. True or False? Depreciation Expense reflects an allocation of an asset's original cost rather than an allocation based on the economic value that is being consumed.