Question: Basic information relating to a new machine purchased by Gotham Company is presented in problem.
Instructions: Using the facts presented in problem, compute depreciation using the following methods in the year indicated.
(a) Declining-balance using double the straight-line rate for 2017 and 2018.
(b) Units-of-activity for 2017, assuming machine usage was 480 hours. (Round depreciation per unit to the nearest cent.)
Problem: Gotham Company purchased a new machine on October 1, 2017, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8-year life.
Instructions: Compute the depreciation expense under the straight-line method for 2017 and 2018, assuming a December 31 year-end.