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On 1/1/2010, a machine was purchased for $90,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 5 years.

On 1/1/2010, a machine was purchased for $90,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 5 years. The machine can operate for 100,000 hours before it needs to be replaced. The company closed its books on December 31, 2010 and operates the machine as follows: 2010- 20,000 hrs; 2011- 25,000 hrs; 2012- 15,000 hrs; 2013- 30,000 hrs; 2014 - 10,000 hrs. Instructions: Using the chart on the left, (a) Compute the annual depreciation charges over the machine's life assuming a December 31 year-end for each of the following depreciation methods. (1) Straight Line method. (2) Activity Method. (3) Sum of the years' digits method. (4) Double Declining balance method (b) Assume a fiscal year end of September 30. Compute the annual depreciation charges over the machine's life for each of the following depreciation methods. (1) Straight Line method. (2) Activity Method. (3) Sum of the years' digits method. (4) Double Declining balance method

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