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Rattino Company purchased a neaw machine on October 1,0, at a cast of $150,000. The company estimated that the machine wl have a salvage value of 12.000 The machine is expected to be cused for 10,000 workng hours duting tts 5 vr tife Compute the depreaatian espense uncler the fallocuing a) Straignt-line for 20[7 |b) und, ob acttuty. for 2017-)-assuming-machine c) Decting -balane using dauble the straght- ine metmadis for the qear indicated rate-for-2017 f 2018.
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Part (a) Annual depreciation under Straight-line method (Cost Salvage Value) Life of the asset Annual depreciation under Straight-line method (S150,000 S12,000)/5 S27,600 Depreciation expense for year 2017=$27,600 Part (b Depreciation per hour under units of activity method S13.80 per hour (S150,000 S12,000)/10,000 Depreciation expense under units-of-activity for 2017, assuming machine usage was 1,700 hours 1,700 hours S13.80 S23,460 Part (c) Useful life of asset 5 yrs So straight-line rate of depreciation 1.Useful life 15-20%, so rate of depreciation under Double Declining Balance method-2*20%-40%Part (c) Useful life of asset 5 yns So straight-line rate of depreciation-1/Useful life-1/5-20%, So rate of depreciation under Double Declining Balance method-2*20% 40% i) Original cost as on October 1, 2016 ii) Depreciation for 2016 $150,000*40%*(3/12) iii) Book value at end 2016 S150,000 S15,000 iv) Depreciation for 2017=$135,000*40%(12/12) v) ok value at end 2018 $135,000 S54,000 vi) Depreciation for 2018=$81,000*40% - S150,000 S15,000 - $135,000 -$54,000 $81,000 = $32,400 So Depreciation for 2017 S54,000 Depreciation for 2018 S32,400

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