Answer:
a. $10,000
b. $19,000
c. $41,000
Explanation:
The computations are shown below:
The depreciation per hour would be
= (Original cost - residual value) ÷ (estimated machine hours)
= ($60,000 - $10,000) ÷ (20,000 hours)
= ($50,000) ÷ (20,000 hours)
= $2.5 per hour
a. Now for the second year, it would be
= Machine hours in second year × depreciation per hour
= 4,000 units × $2.5
= $10,000
b. Accumulated depreciation would be
= (Machine hours in year 1 + Machine hours in year 2) × depreciation per hour
= (3,600 hours + 4,000 hours) × $2.5
= $19,000
c. And, the book value would be
= Original cost - accumulated depreciation
= $60,000 - $19,000
= $41,000
