Question: On June 15, 2017, a second-hand machine was purchased for $157,000. Before being put into service, the equipment was overhauled at a cost of $15,400,
On June 15, 2017, a second-hand machine was purchased for $157,000. Before being put into service, the equipment was overhauled at a cost of $15,400, and additional costs of $400 for direct material and $800 for direct labour were paid in fine-tuning the controls. The machine has an estimated residual value of $8,000 at the end of its five-year useful life. The machine is expected to operate for 100,000 hours before it will be replaced and is expected to produce 1.20 million units in this time. Operating data for the next six fiscal years are provided below. The company has an October 31 fiscal year end.
| Year | Hours of Operation | Units Produced | ||
| 2017 | 10,000 | 110,000 | ||
| 2018 | 20,000 | 270,000 | ||
| 2019 | 20,000 | 264,000 | ||
| 2020 | 20,000 | 310,000 | ||
| 2021 | 18,000 | 134,000 | ||
| 2022 | 12,000 | 112,000 |
Calculate the depreciation charges for each fiscal year under each of the following depreciation methods. (Round unit-of-output per unit to 4 decimal places, e.g. 15.2345 and Round other answers to 0 decimal places, e.g. 5,275.) 1. Straight-line method. Pro-rate June 2017 and 2022 to half a month. 2. Activity method: based on output 3. Activity method: based on input 4. Double-declining-balance method. Pro-rate June 2017 to half a month. 5. CCA, Class 8, 20%
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