Question
The Sprague Company purchased a fabricating machine on January 1, 2020, at a net cost of $130,000. At the end of its four-year useful life,
The Sprague Company purchased a fabricating machine on January 1, 2020, at a net cost of $130,000. At the end of its four-year useful life, the company estimates that the machine Wills be worth $30,000.Sprague also estimates that the machine will run for 25,000 hours uring its four-year life. The company's fiscal year ends on December 31.
Required:
Compute depreciation expense for 2021 through 2024 using each of the following methods:
1.Straight-line
2.Double-declining-balance
3.Sum-of-the-years'-digits
4.Units of production (using machine hours); actual production was as follows:
Year Machine Hours
2020 6,000
2021 8,000
2022 5,000
2023 7,000
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