Compute depreciation expense on the machine

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Question - The cost of equipment purchased by Charleston, Inc., on June 1, 2017, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is esti-mated at 525,000 units. During 2017, the machine was operated 6,000 hours and produced 55,000 units. During 2018, the machine was operated 5,500 hours and produced 48,000 units.

Instructions - Compute depreciation expense on the machine for the year ending December 31, 2017, and the year ending December 31, 2018, using the following methods.

(a) Straight-line.

(b) Units-of-output.

(c) Working hours.

(d) Sum-of-the-years'-digits.

(e) Declining-balance (twice the straight-line rate).

Reference no: EM132532453

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