Question

Exercise 11-05 Your answer is partially correct. Try again Robert Parish Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $12,900 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 21,000 hours. Year-end is December 31 Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.) X (a) Straight-line depreciation for 2020 21000 (b) Activity method for 2020, assuming that machine usage was 800 hours 4000 X (c) Sum-of-the-years'-digits for 2021 32083 (d) Double-declining-balance for 2021 39300

Answer 1

(a) Straight line depreciation for 2020	$8,750	Depreciation for 5 months (($117,900 -$12,900) / 5) * 5 / 12
(a) Activity method for 2020, assuming that machine uses was 800 hours	$4,000	($117,900 - $12,900) * 800 hours / 21,000 hours
(c )Sum-of-the- years' digits for 2021	$28,000	($117,900 - $12,900) * 4 / 15
(d) Double declining-balance for 2021	$39,300	($117,900 - $19,650 ) * (1 / 5) * 2)