Exercise 9-6

Kingbird, Inc. purchased a new machine on October 1, 2019, at a cost of $133,000. The company estimated that the machine will have a salvage value of $19,500. The machine is expected to be used for 10,000 working hours during its 5-year life.

a. Compute the depreciation expense under straight-line method for 2019. (Round answer to 0 decimal places, e.g. 2,125.)

b. Compute the depreciation expense under units-of-activity for 2019, assuming machine usage was 1,500 hours. (Round depreciable cost per unit to 2 decimal places, e.g. 0.50 and depreciation rate to 0 decimal places, e.g. 15%. Round final answer to 2 decimal places, e.g. 2,125.25.)

c. Compute the depreciation expense under declining-balance using double the straight-line rate for 2019 and 2020. (Round answers to 0 decimal places, e.g. 2,125.)