Question

1. (12 points) Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $17,900 at the end of its service life. Its life is estimated at 4 years, and its working hours are estimated at 10,000 hours. Year-end is December 31. Instructions Compute the depreciation expense under the following methods and complete the depreciation schedules below. (a) Straight-line depreciation. (b) Activity method for 2014 and 2015, assuming that machine usage was 2,000 hours for 2014; 1,710 hours for 2015; 3,150 hours for 2016 and 3,140 hours for 2017. (c) Sum-of-the-years'-digits. (d) Double-declining-balance.
1. (12 points) Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $17,900 at the end of its service life. Its life is estimated at 4 years, and its working hours are estimated at 10,000 hours. Year-end is December 31. Instructions Compute the depreciation expense under the following methods and complete the depreciation schedules below. (a) Straight-line depreciation. (b) Activity method for 2014 and 2015, assuming that machine usage was 2,000 hours for 2014; 1,710 hours for 2015; 3,150 hours for 2016 and 3,140 hours for 2017. (c) Sum-of-the-years'-digits. (d) Double-declining-balance. Straight-line Year Cost Book Value, Beginning Depreciation Expense Accumulated Depreciation Book Value, Ending =Ʃ depr exp. =Cost - A/D 1 2 3 4 Units-of-Production (Activity) Year Cost Book Value, Beginning Depreciation Expense Accumulated Depreciation Book Value, Ending =Ʃ depr exp. =Cost - A/D 1 2 3 4 Sum-of-the-Years’ Digits Year Cost Book Value, Beginning Depreciation Expense Accumulated Depreciation Book Value, Ending =Ʃ depr exp. =Cost - A/D 1 2 3 4 Double Declining Balance Year Cost Book Value, Beginning Depreciation Expense Accumulated Depreciation Book Value, Ending =Ʃ depr exp. =Cost - A/D 1 2 3 4