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ABC purchased machinery for $176,400 on January 1, 2017. It is estimated that th

ID: 2574575 • Letter: A

Question

ABC purchased machinery for $176,400 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $14,700, production of 91,400 units, and working hours of 40,900. During 2017, the company uses the machinery for 11,452 hours, and the machinery produces 11,882 units.

Compute depreciation under the straight-line, units-of-output, working hours, sum-of-the-years’-digits, and double-declining-balance methods.

PLEASE SHOW how you get the answer.

Depreciation Straight-line Units-of-output Working hours Sum-of-the-years'-digits 8,085 21,021 45,276 14,630 17,640

Explanation / Answer

Year Cost of the assets Salvage value Depreciable value sum of the year Depreciation 2017 $                 176,400 $           14,700 161700 1+2+3+4+5+6+7+8+9+10+11+12+13+14+15+16+17+18+19+20 = 210 $161,700 * (20/210) = $15,400

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