Reference no: EM131021033
In recent years, Farr Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
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Machine Acquired
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Cost
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Salvage Value
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Useful Life(in years)
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Depreciation Method
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1
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Jan. 1, 2012
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$138,000
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$53,200
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8
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Straight-line
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2
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July 1, 2013
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94,000
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10,700
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5
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Declining-balance
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3
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Nov. 1, 2013
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107,920
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7,120
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7
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Units-of-activity
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For the declining-balance method, Farr Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 36,000. Actual hours of use in the first 3 years were: 2013, 700; 2014, 5,240; and 2015, 6,750.
1. Compute the amount of accumulated depreciation on each machine at December 31, 2015.
2. If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2013 and In 2014?
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