In recent years, Darnell Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and each selected a different method. Information concerning the machines is summarized below.
|
Machine
|
Acquired
|
Cost
|
Salvage
Value
|
Useful Life
in Years
|
Depreciation
Method
|
|
1
|
1/1/11
|
$105,000
|
$ 5,000
|
10
|
Straight-line
|
|
2
|
1/1/12
|
180,000
|
10,000
|
8
|
Declining-balance
|
|
3
|
11/1/14
|
125,000
|
15,000
|
6
|
Units-of-activity
|
For the declining-balance method, the company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 25,000. Actual hours of use in the first 3 years were 2014, 2,000; 2015, 4,500; and 2016, 5,500.
Instructions
(a) Compute the amount of accumulated depreciation on each machine at December 31, 2014.
(b) If Machine 2 had been purchased on May 1 instead of January 1, what would be the depreciation expense for this machine in (1) 2012 and (2) 2013?