Question

Exercise 10-06 a-c Sarasota Company purchased a new machine on October 1, 2020, at a cost of $113,500. The company estimated that the machine will have a salvage value of $13,500. The machine is expected to be used for 10,000 working hours during its 5-year life. Compute the depreciation expense under straight-line method for 2020. (Round answer to 0 decimal places, e.g. 2,125.) 2020 Depreciation expenses LINK TO TEXT Compute the depreciation expense under units-of-activity for 2020, assuming machine usage was 1,620 hours. (Round intermediate calculations to 1 decimal place, e.g.10.1 and final answer to o decimal places, e.g. 2,125.) 2020 Depreciation expense LINK TO TEXT Compute the depreciation expense under declining-balance using double the straight-line rate for 2020 and 2021. (Round answers to o decimal places, e.g. 2,125.) 2020 2021 Depreciation expense

Answer 1

Straight line Depreciation
2020 = ($113500-13500)/5 x 3/12 = $5000

Units of Activity Depreciation
2020 = ($113500-13500)/10000 x 1620 = $16200

Double Declining Depreciation
2020 = $113500 x 40% x 3/12 = $11350
2021 = ($113500-11350) x 40% = $40860