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Question 5) Megan Company purchased a new machine on August 1, 2020, at a cost of $131,000. The company estimated that the machine has a
Question 5) Megan Company purchased a new machine on August 1, 2020, at a cost of $131,000. The company estimated that the machine has a salvage value of $51,452, is expected to be used for 66,290 working hours, and will have a 7-year life. Instructions: A) Compute the depreciation expense under the straight-line method for 2020, 2024, and 2027, assuming a December 31 year-end. B) Compute the depreciation expense under the double-declining balance method for 2020 and 2021. Assume the DDB rate is 100% / 7 years x 2 = 28.57% C) Compute the depreciation expense under the units-of-activity method for 2020, assuming machine usage was 4,444 hours. (record depreciation per unit to the nearest cent.)
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