Question

About Jesse Owens + PRINTER 4: X CALCULATOR reedom House G what made Jesse O... Return to Blackboard /edugen/lti/main.uni N Netflix Gjessie owens inport... Madison Howell - - gandt, Accounting Principles, 13e l System Announcements (b) Calculate the amount of depreciation expense that Pina Colada should record for Machine B each year of its useful life under the following assumptions. (ROL depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to o decimal places, e.g. 2.125.) 2023 (1) (2) (3) Pina Colada uses the straight-line method of depreciation. Pina Colada uses the declining balance method. The rate used is twice the straight-line rate. Pina Colada uses the units-of-activity method and estimates that the useful life of the machine is 136,000 units. Actual usage is as follows: 2020, units; 2021, 39,000 units; 2022, 26,000 units: 2023, 19,000 units. Depreciation Expense 2021 2022 2020 Straight-line method SAVE FOR LATER Dedining-balance methods Attempts: 0 of 3 used Study Units-of-activity method SHOW LIST OF ACCOUNTS WileyPLUS - Googl. LINK TO TEXT P gewileyplus.com/edgeruchare/assignments alistunde ne here to search O RE

Answer 1

	2020	2021	2022	2023
Straight-line method	42,500	42,500	42,500	42,500
Declining-balance method	90,000	45,000	22,500	11,250
Units-of-activity method	65,000	48,750	32,500	23,750

WORKING NOTES:

(A)

First of all, the amount of depreciation for MACHINE B:

Depreciation = (Acquisition cost - Salvage value) / estimated useful life

= (180,000 - 10,000) / 4

= $42,500 per year as per straight line method.

Rate of depreciation = (Annual Depreciation * 100) / (Acquisition cost - Salvage value)

= 42,500 * 100 / 170,000

= 25%

(B)

Hence, Rate of depreciation for written-down value method = 2 * 25% = 50%.

(C)

Formula for Units-of-activity method = Net value of machine * (Annual usage / total usage)