Reference no: EM133007284

On April 22, 2020, Blossom Enterprises purchased equipment for $139,700. The company expects to use the equipment for 11,500 working hours during its 4-year life and that it will have a residual value of $15,500. Blossom has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 1,800 hours in 2020; 2,700 hours in 2021; 3,600 hours in 2022; 2,500 hours in 2023; and 1,100 hours in 2024.

Problem 1: Calculate depreciation expense for the life of the asset under double diminishing-balance method. (Round answers to 0 decimal places, e.g. 5,276.)

Problem 2: Calculate a depreciation expense for the life of the asset under units-of-production method. (Round unit rate to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 5,276.)

Problem 3: Which method results in the lowest profit over the life of the asset?

Problem 4: Which method results in the least cash used for depreciation over the life of the asset?