Part B (11 minutes, 6 marks)

A high-speed multiple-bit drill press costing $280,000 was purchased on June 30, 2020. The company has a December 31 year-end. The drill press has an estimated residual value of $40,000 and a life of ten years.What is the annual depreciation for each of the first two full years under the following depreciation methods?

1. Declining-balance method:

1. Year one, $______________.

b. Year two, $______________.

1. Units of production (activity) method (lifetime output is estimated at 240,000 units; the press produced 24,000 units in year one and 36,000 in year two):

a. Year one, $______________.

b. Year two, $______________.

1. Straight-line depreciation method:

a. Year one, $______________.

b. Year two, $______________.

1. Assume the estimated life of the machine was revised to 6 years remaining at the end of year 2. What is the amount of depreciation that will be recognized in year 3 under the straight line method?

Year three, $______________.