Question

File Home insert Design Layout References O PROTECTED VIEW Be careful-files from the Internet can contain vinges. Unless you need to edit, it's water to stay in Protected View Enable Editing Sunshine Corporation purchased a new machine on Jan 4, 2018 for $185,000 cash. The machine has a useful life of five years or of 26,000 hours. After the useful life the machine will have a residual value of $3,000. The machine was used for 3,600 hours in 2018 and 4.500 hours in 2019 Required: Tulsie Ramda a. Calculate the depreciation expense for 2018 and 2019 under each of the following methods: Straight-line (3 marks) Double diminishing-balance (5 marks) Units-of production (5 marks) III b. Calculate the carrying amount at the end of 2019 for the machine when the company is using the Straight-line depreciation method. (3 marks) Shot on OnePlus By @Shreya C. Record the journal entry for the cash purchase of the machine on Jan

Answer 1

	Depreciation Under Unit of Production method	2018	2019
1	Asset value	$ 1,85,000.00	$ 1,85,000.00
2	Salvage value	$       3,000.00	$       3,000.00
3	Depreciable Base(1-2)	$ 1,82,000.00	$ 1,82,000.00
4	Total production hours	$     26,000.00	$     26,000.00
5	Depreciation per Unit (3/4)	$               7.00	$               7.00
6	Hours used in that period	$       3,600.00	4500
	Depreciation for the period (5*6)	$     25,200.00	$     31,500.00

	Straight line method Depreciation	2018
1	Asset value	$ 1,85,000.00
2	Salvage value	$       3,000.00
3	Depreciable Base(1-2)	$ 1,82,000.00
4	Life of Asset	5
5	Depreciation (3/4)	36400
	i.e Deprecation for 2019 (3/4)	36400

	Diminishing balance method	2018
1	Asset value	$ 1,85,000.00
2	Salvage value	$       3,000.00
3	Depreciable Base(1-2)	$ 1,82,000.00
4	Life of asset	5
5	Depreciation (3/4)	36400
6	% 0f depreciation charged(5/3)	20
7	Particulars	2018
8	Depreciable base	182000
9	Depreciation rate	20%
10	Depreciation amount (8/9)	36400
11	carrying amount after depreciation for 2018	145600
12	Depreciation rate	20%
	Depreciation amount for 2019(11/12)	29120

Note: Assuming since diminshing rate is given so calculating the depreciation as per SLM and getting percentage and applying that rate for diminishing rate