I need A) straight line for 2011 B) Units-of-activity for 2011, assuming machine

Question

I need

A) straight line for 2011

B) Units-of-activity for 2011, assuming machine usage was 2,000 hours.

C) Declining-balance using double the straight-line rate for 2011 and 2012.

For c I already have 13810 for 2011

Kelm Company purchased a new machine on October 1, 2011, at a cost of $138,100. The company estimated that the machine will have a salvage value of $11,500. The machine is expected to be used for 11,200 working hours during its 5-year life. Compute the depreciation expense under the following methods for the year indicated.

Explanation / Answer

A. Depn per year in straight line = 1/5 = 20%

So full year depreciation = (138,100-11,500)*20% = 25,320

As we have only 3 months in 2011, depreciation for 2011 = 25,320 *3/12 = 6,330

B. Depreciation for every hour = (138,100-11,500) / 11,200 = 11.30357

Depreciation for 2011 = 11.30357*2000 = 22,607.14

C. Double depreciating rate = 2*20% = 40%

So 2011 depreciation = 138,100 * 40% * 3/12 = 13,810

Value at end of 2011 = 138,100 - 13,810 = 124,290

Depreciation for 2012 = 124,290 * 40% = 49,716

Hope this helped ! Let me know in case of any queries.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.