Question

Cullumber Company purchased a new machine on October 1,2019, at a cost of $110,000. The company estimated that the machine will have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 4-year life Compute the depreciation expense under straight-line method for 2019. (Round answer to O decimal places, e.g. 2,125.) 2019 Depreciation expense Compute the depreciation expense under units-of-activity for 2019, assuming machine usage was 1,500 hours. (Round depreciable cost per unit to 2 decimal places, eg. 0.50 and depreciation rate to 0 decimal places, eg. 15%. Round final answer to 2 decimal places, eg. 2,125.25. 2019 Depreciation expense

Answer 1

a) Straight line Depreciation (2019) = (110000-10000/4)*3/12 = 6250

b) Unit of production (2019) = (110000-10000/10000)*1500 = 15000

c) Double decline balance

	2019	2020
Depreciation expense	110000*50%*3/12 = 13750	110000*50%*9/12+110000*50%*50%*3/12 = 48125