Acme Corporation purchased a new machine on September 30, 20X1 at a cost of $23,000. The machine is expected to last five years and have a salvage value of $3,000 at the end of that time. Acme has a calendar fiscal year.
REQUIRED:
Part 1:Determine the depreciation expense and the ending book values of the machine for fiscal years 20X1-20X6 using the straight-line depreciation method. (Show calculations.)
Part 2:Determine the depreciation expense and the ending book values of the machines for fiscal years 20X1-20X6 using the double declining balance depreciation method. (Show calculations.)
Part 3:Determine the depreciation expense and the ending book values of the machines for fiscal years 20X1-20X6 using the units of activity depreciation method. Assume the machine is expected to be used for 100,000 hours and was used as follows: 20X1: 10,000 hours; 20X2: 16,000; 20X3: 21,000; 20X4: 22,000 hours; 20X5: 20,000 hours; and 20X6: 11,000 hours. (Show calculations.)