Question

DACR Exercise 9-6 (Part Level Submission) Rottino Company purchased a new machine on October 1, 2015, at a cost of $145,500. The company estimated that the machine will have a salvage value of $14,900. The machine is expected to be used for 11,000 working hours during its 5-year life. (a) Your answer is correct. Compute the depreciation expense under straight-line method for 2015. (Round answer to O decimal places, e.g. 2,125.) 2015 Straight-line method 6,530 SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 2 of 5 used (b) Your answer is correct. Compute the depreciation expense under units-of-activity for 2015, assuming machine usage was 1,700 hours. (Round per hour value to 2 decimal places, e.g. 21.25 and final answer to 0 decimal places, e.g. 2,125.) 2015 Units-of-activity method 20183.63

Answer 1

Year	2015	2016
Declining balance method	$                                14,550	$                52,380
Workings:
Declining balance method:-
Declining rate	=	(100% / 5 years) X 2
	=	40%
Year		Depreciation expense
2015	(145500*0.4) * 3/12	$                14,550
2016	[(145500- 14550) * 0.4]	$                52,380