Sandhill Co. purchased a new machine on October 1, 2017, at a cost of $88,700. T

Question

Sandhill Co. purchased a new machine on October 1, 2017, at a cost of $88,700. The company estimated that the machine has a salvage value of $7,400. The machine is expected to be used for 63,000 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 O decimal places, e.g. 125) 2017 2018 Depreciation using the Declining-balance method,% LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE Calculate the depreciation cost per hour. (Round answer to 2 decimal places, e.g $1.25) Depreciation cost per hour Units-of-activity for 2017, assuming machine usage was 430 hours. (Round answer to o decimal places, e.g. 125) Depreciation using the Units-of-activity method for 2017 LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE

Explanation / Answer

Depreciation using declining balance method: 2017 5544 =88700*25%/12*3 2018 20789 =(88700-5544)*25% 2 Depreciation cost per hour=(88700-7400)/63000= $1.29 Depreciation for 2017=430*1.29= $555

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