Ivanhoe Company purchased a new machine on October 1, 2017, at a
cost of $ 87,800. The company estimated that the machine has a
salvage value of $ 8,800. The machine is expected to be used
for 64,200 working hours during its 8-year
life.
Compute depreciation using the following methods in the year
indicated.
Declining-balance using double the straight-line rate for 2017 and 2018. (Round answers to 0 decimal places, e.g. 125)
2017 |
2018 |
|||
---|---|---|---|---|
Depreciation using the Declining-balance method |
$ enter a dollar amount |
$ enter a dollar amount |
Calculate the depreciation cost per hour. (Round answer to 2 decimal places, e.g. $1.25)
Depreciation cost per hour |
$ enter the depreciation cost per hour in dollars rounded to 2 decimal places |
Units-of-activity for 2017, assuming machine usage
was 410 hours. (Round answer to 0 decimal
places, e.g. 125)
Depreciation using the Units-of-activity method for 2017 $ enter the depreciation using the Units-of-activity method in dollars rounded to 0 decimal places |
A |
Cost |
$ 87,800.00 |
B |
Residual Value |
$ 8,800.00 |
C=A - B |
Depreciable base |
$ 79,000.00 |
D |
Life [in years] |
8 |
E=C/D |
Annual SLM depreciation |
$ 9,875.00 |
F=E/C |
SLM Rate |
12.50% |
G=F x 2 |
DDB Rate |
25.00% |
2017 |
2018 |
$ 5,487.50 |
$ 20,578.13 |
[$87800 x 25% x 3/12] |
[(87800 – 5487.50) x 25% x12/12] |
>Depreciation cost per hour = $79000 / 64200 hours = $ 1.23 per hours
>Depreciation using the units of activity method for 2017 = 410 hours x $ 1.23 = $ 504
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