Mike's Company purchased equipment that cost $118,000 on August 1, 2018. The equipment has an estimated...

Mike's Company purchased equipment that cost $118,000 on August 1, 2018. The equipment has an estimated useful life of eight years with an estimated salvage of $10,000. Mike's Company has a December 31 year-end. Calculate the following, showing all of your computations well-labeled and in good form under each of the followingindependent scenarios:

1. The equipment is depreciated using machine hours. The machine is expected to be used for a total of 110,000 hours over it estimated useful life. The following hours of usage were recorded in 2018, 2019, and 2020:

2018
2019
2020

6,000 hours 13,000 hours 12,000 hours

(a) Calculate the depreciation for 2019 using the above data. Round to the nearest hundredth.
(b) Calculate the book value on the machine at December 31, 2020.

Straight-line method.

(a) Calculate the depreciation for 2019 using the above data.
(b) Calculate the book value on the machine at December 31, 2020.

Sum-of-the-years’ digits method

(a) Calculate the depreciation for 2019 using the above data.

(b) Calculate the book value on the machine at December 31, 2019.

Double declining-balance method. Round your calculations to the nearest dollar.

(a) Calculate the depreciation for 2019 using the above data.
(b) Calculate the book value on the machine at December 31, 2019.

Expert Solution

ekkarill92 answered 1 year ago

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