Ayayai Corp. purchased machinery for $417,000 on May 1, 2020. It is estimated that it will have
Question:
Ayayai Corp. purchased machinery for $417,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, residual value of $17,000, production of 160,000 units, and 20,000 working hours. The machinery will have a physical life of 15 years and a salvage value of $3,000. During 2021, Ayayai Corp. used the machinery for 2,000 hours and the machinery produced 26,500 units. Ayayai prepares financial statements in accordance with IFRS.
From the information given, calculate the depreciation charge for 2021 under each of the following methods, assuming Ayayai has a December 31 year end.
Calculate the depreciation charge for 2021 under straight-line method.
Calculate the depreciation charge for 2021 under units of production method
Calculate the depreciation charge for 2021 under working hours method.
Calculate the depreciation charge for 2021 under declining-balance, using a 20% rate.
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling