Problem 9-3A On January 1, 2019, Larkspur Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $43,000. Related expenditures included: sales tax $1,700, shipping costs $200, Insurance during shipping $100, installation and testing costs $70, and $100 of oil a lubricants to be used with the machinery during its first year of operations. Larkspur estimates that the useful life of the machine is 5 years with a $4,050 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. The recorded cost of this machine was $180,000. Larkspur estimates that the useful life of the machine is 4 years with a $18,180 salvage value remaining at the end of that time period. Machine B: Your answer is partially correct. Try again. Prepare the following for Machine A. (Round answers to 0 decimal places, e.g. 2,125. 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 o for the amounts.) 1. The journal entry to record its purchase on January 1, 2019. 2. The journal entry to record annual depreciation at December 31, 2019. No. Account Titles and Explanation Debit Credit 1. Machine 45170 M | Cash 45170 2. Depreciation Expense 8224 Machine 8224 P our answer is partially correct. Try again. 15660 Calculate the amount of depreciation expense that Larkspur 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) (2) (3) Larkspur uses the straight-line method of depreciation. Larkspur uses the declining-balance method. The rate used is twice the straight-line rate. Larkspur uses the units-of-activity method and estimates that the useful life of the machine is 93,000 units. Actual usage is as follows: 2019, 42,000 units; 2020, 28,000 units; 2021, 14,000 units; 2022, 9,000 units. 2019 Depreciation Expense 2020 2021 40455 2022 Straight-line method 40455 40455 40455 Declining-balance method nce method 80910 | 44541 44541 24520 | 13498 13498 Units-of-activity method 73080 48720 24360 15660 Your answer is partially correct. Try again. Which method used to calculate depreciation on Machine B reports the highest amount of depreciation expense in year 1 (2019)? TDeclining-balance method The highest amount in year 4 (2022)? Straight-line method The highest total amount over the 4-year period? T Declining-balance method
