Question

Ivanhoe Company purchased a new machine on October 1, 2017, at a cost of $87,800. The company estimated that the machine has a salvage value of $8,800. The machine is expected to be used for 64,200 working hours during its 8-year life. Compute depreciation using the following methods in the year indicated. Declining-balance using double the straight-line rate for 2017 and 2018. (Round answers to o decimal places, e.g. 125) 2017 2018 Depreciation using the Declining-balance method Calculate the depreciation cost per hour. (Round answer to 2 decimal places, e.g. $1.25) Depreciation cost per hour Units-of-activity for 2017, assuming machine usage was 410 hours. (Round answer to 0 decimal places, e.g. 125) Depreciation using the Units-of-activity method for 2017 Open Show Work

Answer 1

straight line method Depreciation p'a a cost of machine & Salage value ще е $ 87, 800 - 81800 - $9875 - Depreciation Expense 2017 $9875 x 3/12 = $2,469 2018 $9875

calculation of depreciation > Double decling Balance methodi cost of machine - $87,800; salvage value $8,800. useful life - 2 years Depreciation rate - 2 unter x 100 = 2 x 100 25% useful eye • Depreciation Expense. 2017 - $ 87,800 x 25%.3 = $5,485 2018 28 (87,800 - $5485)× 25% = ($20,579) = units of activity method calculation of depreciation rate per howe i Depreciation rate a cost of machinet) sawage value Estimated hours. $ 87,800 - 8,800 64, 200 $1.23 pepreciation expense for the year 2017 for 410 hows, - ulonour x $1.23 $505 (oo) $504

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