Question
Sheffield Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May. Price $113,900
Sheffield Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May.
Price | $113,900 | |
Credit terms | 2/10, n/30 | |
Freight-in | $ 1,072 | |
Preparation and installation costs | $ 5,092 | |
Labor costs during regular production operations | $14,070 |
It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Sheffield intends to use the machine for only 8 years, however, after which it expects to be able to sell it for $2,010. The invoice for Machine #201 was paid May 5, 2020. Sheffield uses the calendar year as the basis for the preparation of financial statements.
(a)
Compute the depreciation expense for the years indicated using the following methods.
Depreciation Expense | ||||
---|---|---|---|---|
(1) | Straight-line method for 2020 | $enter a dollar amount | ||
(2) | Sum-of-the-years'-digits method for 2021 | $enter a dollar amount | ||
(3) | Double-declining-balance method for 2020 | $enter a dollar amount |
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