Question

On January 1, 2015, a machine was purchased for $109,800. The machine has an estimated salvage value of $7,320 and an estimated useful life of 5 years. The machine can operate for 122,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 24,400 hrs; 2016, 30,500 hrs; 2017, 18,300 hrs; 2018, 36,600 hrs; and 2019, 12,200 hrs.

Part 1

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Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

(1)		Straight-line Method		$
(2)		Activity Method
		Year
		2015		$
		2016		$
		2017		$
		2018		$
		2019		$
(3)		Sum-of-the-Years'-Digits Method
		Year
		2015		$
		2016		$
		2017		$
		2018		$
		2019		$
(4)		Double-Declining-Balance Method
		Year
		2015		$
		2016		$
		2017		$
		2018		$
		2019		$

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Part 2

Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)

Year		Straight-line Method		Sum-of-the-years'-digits method		Double-declining-balance method
2015		$		$		$
2016
2017
2018
2019
2020

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Answer 1