Depreciation Methods

Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates:

Service life	5 years or 10,000 hours
Production	180,000 units
Residual value	$ 18,000

In 2019, Gruman uses the machine for 1,700 hours and produces 50,000 units. In 2020, Gruman uses the machine for 1,200 hours and produces 34,000 units. If required, round your final answers to the nearest dollar.

Required:

Compute the depreciation for 2019 and 2020 under each of the following methods:

Activity method based on hours worked

Activity method based on units of output

For each method, what is the book value of the machine at the end of 2019? At the end of 2020?

Straight-line method Activity method based on hours worked

Activity method based on units of output