A Production Machine Which Cost $2,200,000 Is Acquired on October

question 108

Essay

A production machine which cost $2,200,000 is acquired on October 1, 2018. Its estimated residual value is $200,000 and its expected life is 10 years or about 80,000 operating hours. During 2018, the machine was used to produce products for 3,000 operating hours during 2018 and 8,100 operating hours during 2019. Lorny does not use the half-year convention for depreciating any assets.
Calculate depreciation expense for 2018 and 2019 for each of the following methods:
(a) Straight-line method
(b) Double-declining balance method
(c) Units-of-output method

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Definitions:

Heirs Object

The act of legal beneficiaries or heirs expressing opposition or contesting certain aspects of a will or estate settlement.

Depositary Bank

A bank that holds securities in its custody for depositors and facilitates the exchange and transactions of these securities.

Electronic Funds Transfer Act

A federal law that protects consumers engaging in the transfer of funds through electronic methods, ensuring their rights and establishing responsibilities for institutions.

Revised Article 4

An update or amendment to a section of the Uniform Commercial Code dealing primarily with bank deposits and collections.