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Question - Depreciation Computations-Four Methods
Maserati SpA purchased a new machine for its assembly process on August 1, 2019. The cost of this machine was €150,000. The company estimated that the machine would have a residual value of €24,000 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 21,000 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 2019.
b. Activity method for 2020, assuming that machine usage was 800 hours.
c. Sum-of-the-years'-digits for 2020.
d. Double-declining-balance for 2020.
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