On June 1, 2018, Macho Manufacturing Company purchased new equipment for $89,000. The equipment is estimated to have a salvage value of $5,000 at the end of its estimated service life of 7 years. Additional estimates includes 42,000 total working hours and 525,000 total production units.

During 2018, the actual results were:

6,000 hours of operation

55,000 units produced

During 2019, the actual results were:

5,500 hours of operation

48,000 units produced

Instructions

Calculate the depreciation expense for 2017 and 2018 (year ending Dec 31) for this machine using the following methods:

1. Straight line

2. Units-of-output

3. Working hours

4. Declining-balance (twice the straight-line rate)