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Question - ABC Corporation purchased a new machine on June 1, 2016. The cost of this machine was $150 000. The corporation estimated that the machine would have no salvage value. Its life is estimated at 10 years and its working hours are estimated at 20 000 hours. Year-end is December 31.
Instructions - Compute the depreciation expense under the following methods. Each of the following should be considered unrelated.
A. Straight-line depreciation for 2016
B. Activity method for 2016, assuming that machine usage was 500 hours
C. Sum-of-the-years'-digits for 2018
D. Double-declining-balance for 2017
2) Which method shows highest depreciation in earlier years?
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