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Crane Ltd. purchased a new machine on April 4, 2020, at a cost of $172,000. The company estimated that the machine would have a
Crane Ltd. purchased a new machine on April 4, 2020, at a cost of $172,000. The company estimated that the machine would have a residual value of $14,000. The machine is expected to be used for 10,000 working hours during its four-year life. Actual machine usage was 1,600 hours in 2020; 2,000 hours in 2021; 2,200 hours in 2022; 2,300 hours in 2023; and 1,900 hours in 2024. Crane has a December 31 year end. (a) Calculate depreciation for the machine under each of the following methods: (Round expense per unit to 2 decimal places, e.g. 2.75 and final answers to O decimal places, e.g. 5,275.) (1) Straight-line for 2020 through to 2024. 2020 expense 2021 expense 2022 expense 2023 expense A 2024 expense A +A (2) Diminishing-balance using double the straight-line rate for 2020 through to 2024. 2020 expense 2021 expense 2022 expense 2023 expense A 2024 expense +A A (3) Units-of-production for 2020 through to 2024. 2020 expense 2021 expense +A $ 2022 expense 2023 expense A 2024 expense +A A
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1 StraightLine Method This method evenly spreads the depreciation expense over the useful life of the asset Calculation Depreciable Cost Cost of machine Residual value Depreciable Cost 172000 14000 15...Get Instant Access to Expert-Tailored Solutions
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Step: 3
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