Whispering Corporation purchased a new machine for its assembly process on Augus

Question

Whispering Corporation purchased a new machine for its assembly process on August 1, 2017. The cost of this machine was $122,616. The company estimated that the machine would have a salvage value of $13,416 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 19,500 hours. Year-end is December 31.

Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.)

Sum-of-the-years'-digits for 2018 $

Double-declining-balance for 2018 $

Explanation / Answer

Depreciation under Sum of the year digits method

Depreciation under Double declaining balance

Year Cost of the assets Salvage value Depreciable value sum of the year 2017 Depreciation 2018 Depreciation 2017 $                     122,616 $               13,416 $                      109,200 1+2+3+4+5 = 15 $109,200*(5/15) * (5 /12) = $15,167 $109,200*(5/15) * (7 /12) = $21,233 2018 $                     122,616 $               13,416 $                      109,200 1+2+3+4+5 = 15 $109,200*(4/15) * (5 /12) = $12,133 Ful Depreciation $                                                          15,167 $                                                          33,366

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