Sinclair Company Purchased a New Machine on January 1, 2013

question 44

Essay

Sinclair Company purchased a new machine on January 1, 2013, at a cost of $200,000. The machine is expected to have an eight-year life and a $30,000 salvage value. The machine is expected to produce 720,000 finished products during its eight-year life. Production during 2013 was 70,000 units and during 2014 was 110,000 units.
Required:
Determine the amount of depreciation expense to be recorded on the machine for the years 2013 and 2014 under each of the following methods:
1) Straight-line
2) Units of production
3) Double-declining balance

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Definitions:

The National Post

A Canadian English-language national newspaper based in Toronto, covering a wide range of topics including news, current affairs, and editorial content.

Spot Trade

A financial transaction for immediate delivery of the traded asset.

Exchange Rate

The value of one currency for the purpose of conversion to another, facilitating international trade and finance by determining how much one currency is worth in terms of the other.

Forward Rate

An agreed upon rate for a financial transaction that will occur at a future date.