1. Numo Company purchased a new machine on October 1, 2020, at a cost of $145,000. The company estimated that the machine will have a salvage value of $25,000. The machine is expected to be used for 20,000 working hours during its 5-year life.

Instructions

Compute the depreciation expense under the following methods for the year indicated.

a. Straight-line for 2020.

b. Units-of-activity for 2020, assuming machine usage was 3,400 hours.

c. Declining-balance using double the straight-line rate for 2020 and 2021.