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Problem 1: A factory machine was purchased for $386000 on January 1, 2018. It was estimated that it would have a $79000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40000 hours in the 5 years. The company ran the machine for 4000 actual hours in 2018. If the company uses the units-of-activity method of depreciation, Determine what the amount of depreciation expense for 2018 would be
Option 1: $79000.
Option 2: $30700.
Option 3: $38600.
Option 4: $61400.
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