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Kelm Company purchased a new machine on October 1, 2010, at a cost of $120,000.The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for 10,000 working hours during its 5-year life.
Instructions
Compute the depreciation expense under the following methods for the year indicated.
(a) Straight-line for 2010.
(b) Units-of-activity for 2010, assuming machine usage was 1,700 hours.
(c) Declining-balance using double the straight-line rate for 2010 and 2011.
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