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Hanson Manufacturing Company purchased a machine for $1,060,000 at the beginning of 2018. The machine has an estimated useful life of five years and an
Hanson Manufacturing Company purchased a machine for $1,060,000 at the beginning of 2018. The machine has an estimated useful life of five years and an estimated residual value of $270,000. The machine, which is expected to last 20,000 hours, was operated 3,000 hours in 2018 and 2,000 hours in 2019. REQUIRED: 1. Compute the annual depreciation for 2018 and 2019 under the following depreciation methods. You must show all of your work to receive any credit. (a) Straight-line (b) Units of production: (c) Double-declining balance: Assume the machine is sold at the beginning of 2020 for $760,000. Prepare the journal entry to record the disposal of the machine under each of the three methods. a) Straight-line: b) Units of production: c) Double-declining balance
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