In recent years, Walz Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
|
|
|
Salvage
|
Useful Life
|
|
|
Machine
|
Acquired
|
Cost
|
Value
|
(in years)
|
Depreciation Method
|
|
1
|
Jan. 1, 2010
|
$96,000
|
$12,000
|
8
|
Straight-line
|
|
2
|
July 1, 2011
|
85,000
|
10,000
|
5
|
Declining-balance
|
|
3
|
Nov. 1, 2011
|
66,000
|
6,000
|
6
|
Units-of-activity
|
For the declining-balance method, Walz Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000. Actual hours of use in the first 3 years were: 2011, 800; 2012, 4,500; and 2013, 6,000.
Instructions
(a) Compute the amount of accumulated depreciation on each machine at December 31, 2013.
(b) If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2011? In 2012?