Exercise 9-20 Oriole Company purchased a new machine on October 1, 2017, at a co

Question

Exercise 9-20 Oriole Company purchased a new machine on October 1, 2017, at a cost of $93,300. The company estimated that the machine has a salvage value of $8,900. The machine is expected to be used for 61,800 working hours during its 8-year life. Compute depreciation using the following methods in the year indicated Declining-balance using double the straight-line rate for 2017 and 2018. (Round answers to O decimal places, e.g. 125) 2017 2018 Depreciation using the Dcng-balance method ? LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE Calculate the depreciation cost per hour. (Round answer to 2 decimal places, e.g. $1.25) Depreciation cost per hour Units-of-activity for 2017, assuming machine usage was 420 hours. (Round answer to O decimal places, e.g. 125) Depreciation using the Units-of-activity method for 2017 LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE

Explanation / Answer

Rate of DDB = (100/8) *2= 25% Depreciation for 2017 (93300*25%*3/12) 5831 Book value at end of 2017 (9330-5831) 87469 Depreciation for 2018 (87469*25%) 21867 2017 2018 Depreciation under DDB 5831 21867 Cost of Machine 93300 Less: Salvage Value 8900 Depreciable amount 84400 Divide: Life of machine 61800 Annual depreciation 1.366 per hour Depreciation per hour: 1.366 Depreciation forr 2017 (420 hours@1.366) 574

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