Question

Gotham Company purchased a new machine on October 1, 2017, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8-year life. Compute depreciation using the following methods in the year indicated.

Answer 1

Instructions are listed below.

Step-by-step explanation:

A)Straight line:

Annual depreciation= (original cost - salvage value)/estimated life (years)

B) Sum of the years:

Depreciation expense= (remaining useful life/sum of the years' digits)/depreciable cost

C)Double depreciation:

Annual depreciation= 2*[(original cost - residual value)/estimated life (years)]

D) Units method:

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced