Carla Vista Ltd. purchased a new machine on April 4, 2014, at a cost of $162,400

Question

Carla Vista Ltd. purchased a new machine on April 4, 2014, at a cost of $162,400. The company estimated that the machine would have a residual value of $18,000. The machine is expected to be used for 9,500 working hours during its four-year life. Actual machine usage was 1,400 hours in 2014; 2,100 hours in 2015; 2,300 hours in 2016; 2,000 hours in 2017; and 1,700 hours in 2018. Carla Vista has a December 31 year end.

Calculate depreciation for the machine under each of the following methods: (Round expense per unit to 2 decimal places, e.g. 2.75 and final answers to 0 decimal places, e.g. 5,275.)

(1) Straight-line for 2014 through to 2018.

2014 expense $

2015 expense $

2016 expense $

2017 expense $

2018 expense

(2) Diminishing-balance using double the straight-line rate for 2014 through to 2018.

2014 expense $

2015 expense $

2016 expense $

2017 expense $

2018 expense

(3) Units-of-production for 2014 through to 2018.

2014 expense $

2015 expense $

2016 expense $

2017 expense $

2018 expense

Explanation / Answer

1.

Working:

2.

Working:

3.

Working:

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