Question

Exercise 11-05 Your answer is partially correct. Try again Robert Parish Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $117,900. The company estimated that the machine would have a salvage value of $12,900 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 21,000 hours Year-end is December 31 Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.) (a) Straight-line depreciation for 2020 21000 (b) Activity method for 2020, assuming that machine usage was 800 hours 4000 (e) Sum-of-the-years-digits for 2021 32083 (d) Double-declining-balance for 2021 39300

Answer 1

I have provided below the answer of question a and c because other are already correct. Let me know if you need any clarification..

Ans a)
i	Cost of machine =		117900
ii	Salvage value =		12900
iii=i-ii	Depreciable value =		105000
iv	Usefull life =		5
v=iii/iv	annual depreciation=		21000
	Depreciation for 2020 will be only for 5 Month (Aug to Dec)
	Depreciation =	21000*5/12		8750
Ans c)	Sum of digit method.
	As per sum of digit method 1st year depreciation for
	105000*(5/15)	35000
	therefore 5 month depreciation = 35000*5/12				14,583