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Problem 9-8A (Part Level Submission) In recent years, Crane Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different

Problem 9-8A (Part Level Submission)

In recent years, Crane 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 table below.

Machine

Acquired

Cost

Salvage

Value

Useful Life

(in years)

Depreciation

Method

1

Jan. 1, 2015

$121,500

$11,500

10

Straight-line

2

July 1, 2016

71,000

12,000

5

Declining-balance

3

Nov. 1, 2016

68,100

8,100

6

Units-of-activity

For the declining-balance method, Crane Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000. Actual hours of use in the first 3 years were: 2016, 710; 2017, 5,900; and 2018, 7,300.

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