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P9-7B In recent years Howard Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge
P9-7B In recent years Howard Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the tab below. Useful Life Salvage Value $5,000 Depreciation Method Straight-ine (in years) Acquired July 1, 2012 Cost $68,000 Machine 1 4 Declining-balance 64,000 6,000 2 Apr. 1, 2013 4,000 8 Units-of-activity Sept 1, 2013 84,000 3 For the declining-balance method, Howard Company uses the double- declining rate. For the units-of-activity method, total machine hours are expected to be 40,000. Actual hours of use in the first 3 years were: 2013, 1,200; 2014, 6,400; and 2015, 7,000. Instructions: (a) Compute the amount of accumulated depreciation on each bus at December 31, 2015 (b) If machine 2 was purchased on November 1 instead of April 1, what would be the depreciation expense for this machine in 2013? In 2014? (Round to 9adhe nearest dollar.)
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