Dersch Co. purchased a machine on January 1, 2022 for $1,500,000.

a.Using the table below, calculate the annual depreciation expense for the first 3 years of the machine's life (estimated at 5 years or 50,000 hours with a residual value of $150,000) under both Straight-line and Units of Production.During the machine's life it was used 15,000 hours in 2022; 14,000 hours in 2023; and 10,000 hours in 2024. (MAKE SURE YOU SHOW YOUR CALCULATIONS)

b.The company sold the machine on January 1, 2023 for $190,000.The company had decided to use Straight-line depreciation for this piece of machinery when it purchased it back in January 2022.Record the journal entry to record the sale of the machine on January 1, 2024.

ANSWER 3A

Year

Straight Line

Units of Production

2022

2023

2024