Question
Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of this machine was $315,900. The company estimated
Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of this machine was $315,900. The company estimated that the machine would have a salvage value of $15,900 at the end of its service life. Its life is estimated at 4 years, and its working hours are estimated at 40,000 hours. Year-end is December 31.
Instructions
Compute the depreciation expense under the following methods and complete the depreciation schedules below.
(a) | Straight-line depreciation. |
(b) | Activity method for 2014 and 2015, assuming that machine usage was 15,000 hours for 2014; 11,710 hours for 2015; 12,150 hours for 2016 and 1,140 hours for 2017. |
(c) | Sum-of-the-years'-digits. |
(d) | Double-declining-balance. |
Show work (including formulas used)
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