Buddy Corporation purchased a new machine for production on 1/1/18. The cost of the machine was $175,000. The salvage value was estimated to be $25,000. Its useful life was estimated to be 5 years and its working hours was estimated at 25,000 hours. The hours used 2018 thru 2023 were 5,750, 5,000, 4,250, 5,500, 4,500, respectively. Year-end is December 31^st. Fully depreciate the equipment through the full 5 years.

 

Instructions: Compute the depreciation expense under each of the following methods below. Record the journal entry for each year to record the depreciation expense.

 

5.1 Straight-Line method

5.2 Activity method

5.3 Double-Declining Balance method

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Answer Depreciation Expense Calculations for Buddy Corporations Machine Heres the breakdown of depre... View the full answer