KC Corporation purchased a new machine for its assembly process on August 1, 2010. The cost of this machine was $75,000. The company estimated that the machine would have a salvage value of $12,000 at the end of its service life. Its life is estimated

at 5 years and its working hours are estimated at 10,500 hours. Year-end is December 31.

Instructions:

1. Compute the depreciation expense under the following methods.

(a) Straight-line depreciation. (c) Sum-of-the-years-digits.

(b) Activity method (d) Double-declining balance

Note for using Sum-of-the-years-digits method consider the machine was purchased on January 1, 2010. For Activity MethodAssume 800 hours used in 2010.