Answer: The book value of the machine at the end of 2019 would be $26,717,712 calculated using units of production as method of depreciation.
Explanation: The first thing we have to do is to calculate the amortizable value for this we have to substract from the value of purchase the residual value. $40,600,000 - $45,000= $40,555,000
Then we have to calculate the hourly amortization so we must divide the amortizable value by the quantity of hoursexpected to be use by the machine: $40,555,000/26,000hrs= $1,559,81 per hour.
Then in 2018 the machine was used 3700 hours so it was depreciated $5,771,288.46 and in 2018, 5200 hours so it was depreciated $8,111,000
So the book value of the machine at the end of 2019 would be $40,600,000-$5,771,288-$8,111,000=$26,717,712
