SABIC Corporation purchased a new machine for its assembly process on Jan 1, 2016. The cost of this machine was SAR 500,000. The company estimated that the machine would have a salvage value of SAR 20,000 at the end of its service life. Its life is estimated at 5 years and its working hours are estimated at 20,000 hours. The following information at Year-end is December 31 are: Hours Depreciation expense 8,000 5,000 No production 4,000 Year 2016 2017 2018 2019 2020 3,000 Instructions: Compute the depreciation expense for 2016 to 2020 under Activity method.

SABIC Corporation purchased a new machine for its assembly process on Jan 1, 2016. The cost of this machine was SAR 500,000 . The company estimated that the machine would have a salvage value of SAR 20,000 at the end of its service life. Its life is estimated at 5 years and its working hours are estimated at 20,000 hours. The following information at Year-end is December 31 are: Instructions: Compute the depreciation expense for 2016 to 2020 under Activity method