Reference no: EM132957517
Question - Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204:
Price P60,000 Freight-in costs 2,500
Preparation and installation costs 3,900
Labor costs during regular production operation 10,200
Credit terms 2/10, n/30
Total productive output 138,500 units
The company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveille computes depreciation to the nearest whole month.
Required - Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso):
1. 2021: Units of productions
2. 2022: Sum-of-the-years'- digits method
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