Problem 10-03A a-c

On January 1, 2020, Concord Company purchased the following two machines for use in its production process.

Machine A:		The cash price of this machine was $37,500. Related expenditures included: sales tax $2,000, shipping costs $150, insurance during shipping $110, installation and testing costs $120, and $100 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 5 years with a $4,500 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B:		The recorded cost of this machine was $180,000. Concord estimates that the useful life of the machine is 4 years with a $10,200 salvage value remaining at the end of that time period.

Prepare the following for Machine A. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

1.		The journal entry to record its purchase on January 1, 2020.
2.		The journal entry to record annual depreciation at December 31, 2020.

No.	Account Titles and Explanation	Debit	Credit
1.
2.

Calculate the amount of depreciation expense that Concord should record for Machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. 2,125.)

(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 141,500 units. Actual usage is as follows: 2020, 49,500 units; 2021, 39,000 units; 2022, 28,500 units; 2023, 24,500 units.

		Depreciation Expense
		2020		2021		2022		2023
Straight-line method		$		$		$		$
Declining-balance method		$		$		$		$
Units-of-activity method		$		$		$		$

Which method used to calculate depreciation on Machine B reports the highest amount of depreciation expense in year 1 (2020)? Declining-balance methodStraight-line methodUnits-of-activity methodAll of the above The highest amount in year 4 (2023)? Declining-balance methodStraight-line methodUnits-of-activity methodAll of the above The highest total amount over the 4-year period? Declining-balance methodStraight-line methodUnits-of-activity methodAll of the above