Answer:
Intructions are listed below.
Explanation:
Giving the following information:
Hawaiian Specialty Foods purchased equipment for $30,000.
Residual value= $3,000.
The machine operated for 3,100 hours in the first year, and the company expects the machine to operate for a total of 20,000 hours.
1) Straight-line:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (30,000 - 3,000)/4= $6,750
2) Double-declining balance:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2* [(30,000 - 3,000) / 4]= $13,500
3) Activity-based:
Annual depreciation= [(original cost - salvage value)/useful life of production in hours]*hours used
Annual depreciation= (27,000/ 20,000)*3,100
Annual depreciation= $4,185
