Crane Ltd. purchased a new machine on April 4, 2020, at a cost of $188,000. The company estimated that the machine would have a residual value of $16,000. The machine is expected to be used for 10,000 working hours during its four-year life. Actual machine usage was 1,400 hours in 2020; 2,100 hours in 2021; 2,300 hours in 2022; 2,400 hours in 2023; and 1,800 hours in 2024. Crane has a December 31 year end.

(a)

• Your Answer
• Correct Answer (Used)

Calculate depreciation for the machine under each of the following methods: (Round expense per unit to 2 decimal places, e.g. 2.75 and final answers to 0 decimal places, e.g. 5,275.) (1) Straight-line for 2020 through to 2024.

2020 expense		$enter a dollar amount
2021 expense		$enter a dollar amount
2022 expense		$enter a dollar amount
2023 expense		$enter a dollar amount
2024 expense		$enter a dollar amount

(2) Diminishing-balance using double the straight-line rate for 2020 through to 2024.

2020 expense		$enter a dollar amount
2021 expense		$enter a dollar amount
2022 expense		$enter a dollar amount
2023 expense		$enter a dollar amount
2024 expense		$enter a dollar amount

Units-of-production for 2020 through to 2024.

2020 expense
2021 expense		$enter a dollar amount
2022 expense		$enter a dollar amount
2023 expense		$enter a dollar amount
2024 expense		$enter a dollar amount

(b)

Which method results in the highest depreciation expense over the life of the asset? select a method

All three methods are the same.Diminishing-balance methodNo ImpactStraight-line methodUnits-of-production method

Which method results in the highest net income? select a method

All three methods are the same.Diminishing-balance methodNo ImpactStraight-line methodUnits-of-production method

Which method results in the highest cash flow?

select a method

All three methods are the same.Diminishing-balance methodNo ImpactStraight-line methodUnits-of-production method