Exercise 9-6 (Part Level Submission) Rottino Company purchased a new machine on

Question

Exercise 9-6 (Part Level Submission)

Rottino Company purchased a new machine on October 1, 2017, at a cost of $134,000. The company estimated that the machine will have a salvage value of $20,000. The machine is expected to be used for 10,000 working hours during its 5-year life.

(a)

2017

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(b)

2017

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(c)

2017

2018

Exercise 9-6 (Part Level Submission)

Rottino Company purchased a new machine on October 1, 2017, at a cost of $134,000. The company estimated that the machine will have a salvage value of $20,000. The machine is expected to be used for 10,000 working hours during its 5-year life.

Explanation / Answer

a) Straight line dep for 2017 = (134000-20000/5)*3/12 = 5700

b) Unit of production dep for 2017 = (134000-20000/10000)*1910 = 21774

c) Straight line dep rate = 100/5 = 20%

Double decline dep rate = 20*2 = 40%

2017 dep = 134000*40%*3/12 = 13400

2018 dep = (134000*40%*9/12+134000*60%*40%*3/12) = 48240

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