Compute the annual depreciation charges, Cost Accounting

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On January 1, 2012, a machine was purchased for $197,100. The machine has an estimated salvage value of $13,140 and an estimated useful life of 5 years. The machine can operate for 219,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2012, 43,800 hrs; 2013, 54,750 hrs; 2014, 32,850 hrs; 2015, 65,700 hrs; 2016, 21,900 hrs.

1. Compute the annual depreciation charges over the machine's life assuming a December 31 year-end for each of the following depreciation methods.1. Activity Method 2. Sum of the years digits 3. Double declining method

2. Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset's life applying each of the following methods. 1. straight line method 2. sum of the years digits method 3. double declining method

 


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