Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Purchasing cost= $150,000.
The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for 10,000 working hours during its 5-year life.
1) Straight-line:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (150,000 - 12,000)/5= 27,600
<u>2020:</u>
Annual depreciation= (27,600/365)*92 days= $6,956.71
2) Units of activity:
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
Annual depreciation= [(150,000 - 12,000)/10,000]*1.700= $23,460
3) Double-declining balance:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*27,600= 55,200
<u>2020:</u>
Annual depreciation= 55,200/365*92= 13,913.42
<u>2021:</u>
Annual depreciation= [138,000 - 13,913.42)/5]*2= 49,634.63
