help with instructions A B C E96 Rottino Company S150000 The

help with instructions A B C

E9-6 Rottino Company S150,000. The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for 10,000 working hours during its 5-year life Instructions Compute the depreciation expense under the following methods for the year indicated. (a) Straight-line for 2019 (b) Units-of-activity for 2019, assuming machine usage was 1,700 hours. (c) Declining-balance using double the straight-line rate for 2019 and 2020. purchased a new machine on October 1, 2019, at a cost of

Solution

A)Depreciation = [cost- residual value ]/useful life in years

              =[150000 - 12000]/5

              = 138000/5

             = 27600 per year

depreciation for 2019 = 27600*3/12= 6900      [for 3 months ,oct- dec]

b)depreciation = [cost- residual value ]/useful life in hours

           =[150000-12000]/10000

             = $ 13.8 per hour

depreciation expense for 2019 = 1700*13.8 =$ 23460

c)Depreciation rate= 2/ useful life

              = 2/5 = .40 or 40%

Depreciation expense for 2019 = 150000*.40*3/12 = 15000

Carrying value at end of 2019 = 150000-15000 = 135000

Depreciation for 2020 = 135000*.40 = 54000