Heist Company purchased a machine on January 2, 2019, and uses the 150%-declining-balance depreciation method. The machine has an expected life of 10 years and an expected residual value of $5,000. The following costs relate to the acquisition and use of the machine during the first year of its operations:

Required:
1. Compute the depreciation expense for 2019 and 2020.
2. Next Level What is the effect on the financial statements if the company used the straight-line method instead of the 150%-declining-balance method?

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Invoice price Discounts available and taken Freight Installation Testing Normal spoilage of materials during the year Abnormal spoilage of materials during the year Wages of machine operator $50,000 1,000 $ 1,100 750 250 700 900 15,000