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Depreciation Methods
Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates:
Service life 5 years or 10,000 hours Production180,000 units Residual value$ 18,000 In 2016, Gruman uses the machine for 2,000 hours and produces 40,000 units. In 2017, Gruman uses the machine for 1,400 hours and produces 34,000 units. If required, round your final answers to the nearest dollar.
Question 1: Activity method based on hours worked 2016$
Question 2:Activity method based on units of output 2016$
Double-declining-balance method
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