Coronado Corporation purchased a new machine for its assembly process on August
ID: 2565415 • Letter: C
Question
Coronado Corporation purchased a new machine for its assembly process on August 1, 2017. The cost of this machine was $162,702. The company estimated that the machine would have a salvage value of $17,802 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 21,000 hours. Year-end is December 31.
Compute the depreciation expense under the following methods. Each of the following should be considered unrelated
a. Straight Line Method for 2017
b. Sum-of-the-years'-digits for 2018
c. Double-declining-balance for 2018
Explanation / Answer
a)
b)
c)
Straight line Method Cost of Machine $ 162,702 Less: Salvage value $ (17,802) Depreciable value $ 144,900 Depreciation per year ($144,900 / 5) $ 28,980 Depreciation for 2017 ($28,980/12 months * 5 months) $ 12,075