Compute depreciation under different methods.

$($LO $2)$

$($a$)(2)$ $$14,000$

P$9-3$B On January $1,2020,$ Bourgeois Company purchased the following two machines for use in its production process.

Machine A: The cash price of this machine was $$58,000.$ Related expenditures included: sales tax $$2,750,$ shipping costs $$100,$ insurance during shipping $$75,$ installation and testing costs $$75,$ and $$90$ of oil and lubricants to be used with the machinery during its first year of operation. Dill estimates that the useful life of the machine is $4$ years with a $$5,000$ salvage value remaining at the end of that time period.

Machine B: The recorded cost of this machine was $$120,000.$ Dill estimates that the useful life of the machine is $4$ years with a $$10,000$ salvage value remaining at the end of that time period.

Instructions

$($a$)$ Prepare the following for machine $A.$

$(1)$ The journal entry to record its purchase on January $1,2020.$

$(2)$ The journal entry to record annual depreciation at December $31,2020,$ assuming the straight$-$line method of depreciation is used.

$($b$)$ Calculate the amount of depreciation expense that Bourgeois should record for Machine $B$ each year of its useful life under the following assumption.

$(1)$ Bourgeois uses the straight$-$line method of depreciation.

$(2)$ Bourgeois uses the declining$-$balance method. The rate used is twice the straight$-$line rate.

$(3)$ Bourgeois uses the units$-$of$-$activity method and estimates the useful life of the machine is $25,000$ units. Actual usage is as follows: $2020,5,500$ units; $2021,7,000$ units; $2022,8,000$ units; $2023,4,500$ units.

$($c$)$ Which method used to calculate depreciation on Machine B reports the lowest amount of depreciation expense in year $1(2020)?$ The lowest amount in year $4(2023)?$ The lowest total amount over the $4-$year period?