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Problem 11-11 (Part Level Submission) On January 1, 2015, a machine was purchased for $97,200. The...

Problem 11-11 (Part Level Submission)

On January 1, 2015, a machine was purchased for $97,200. The machine has an estimated salvage value of $6,480 and an estimated useful life of 5 years. The machine can operate for 108,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 21,600 hrs; 2016, 27,000 hrs; 2017, 16,200 hrs; 2018, 32,400 hrs; and 2019, 10,800 hrs.

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(a)

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)
(1) Straight-line Method $

(2) Activity Method
Year
2015 $

2016 $

2017 $

2018 $

2019 $

(3) Sum-of-the-Years'-Digits Method
Year
2015 $

2016 $

2017 $

2018 $

2019 $

(4) Double-Declining-Balance Method
Year
2015 $

2016 $

2017 $

2018 $

2019 $

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Answer #1

(a)

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

(1) Straight-line Method (97200-6480/5) $18144

(2) Activity Method
Year
2015 21600*.84 $18144

2016 27000*.84 $22680

2017 16200*.84 $13608

2018 $27216

2019 10800*.84 $9072

(3) Sum-of-the-Years'-Digits Method
Year
2015 90720*5/15 $30240

2016 $24192

2017 $18144

2018 $12096

2019 $6048

(4) Double-Declining-Balance Method
Year
2015 97200*40% $38880

2016 97200*60%*40% $23328

2017 $13997

2018 20995*40% $8398

2019 $6117
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