On June 1, 2019, Concord Company purchased the following machine for use in its production process.

The cash price of this machine was $37,500. Related expenditures included: sales tax $3,600, shipping costs $100, insurance during shipping $50, installation and testing costs $120, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Concord estimates that the useful life of the machine is 4 years with a $5,950 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.

A. Prepare the following:

1.		The journal entry to record its purchase on June 1, 2019.
2.		The journal entry to record annual depreciation at December 31, 2019.

B. Calculate the amount of depreciation expense that Concord should record for each year of its useful life under the following assumptions.

(1)		Concord uses the straight-line method of depreciation.
(2)		Concord uses the declining-balance method. The rate used is twice the straight-line rate.
(3)		Concord uses the units-of-activity method and estimates that the useful life of the machine is 117,100 units. Actual usage is as follows: 2019, 45,000 units; 2020, 33,500 units; 2021, 22,000 units; 2022, 16,600 units.

Straight-Line

	Cost	Depreciation Rate	Annual Depreciation Expense	Accumulated Depreciation	Book Value
Year 1 2019
Year 2 2020
Year 3 2021
Year 4 2022
Year 5 2023

Units of Activity

	Cost	Depreciation Rate	Annual Depreciation Expense	Accumulated Depreciation	Book Value
Year 1
Year 2
Year 3
Year 4
Year 5

Declining Balance

	Cost	Depreciation Rate	Annual Depreciation Expense	Accumulated Depreciation	Book Value
Year 1
Year 2
Year 3
Year 4
Year 5