b. Calculate the amount of depreciation expense that Pele should record for Machine B cach year of its useful life under the following assumptions. 1. Pele uses the straight-line method of depreciation. 2. Pele uses the declining-balance method. The rate used is twice the straight-line rate. 3. Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2020, 42,000 units; 2021, 37,000 units; 2022, 28,000 units; and 2023, 18,000 units. c. Which mcthod used to calculate depreciation on Machine B reports the highest amount of deprecia- year 1 (2020)? The highest amount in year 4 (2023)? The highest total amount over tion сxрense in
b. Calculate the amount of depreciation expense that Pele should record for Machine B cach year of its useful life under the following assumptions. 1. Pele uses the straight-line method of depreciation. 2. Pele uses the declining-balance method. The rate used is twice the straight-line rate. 3. Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2020, 42,000 units; 2021, 37,000 units; 2022, 28,000 units; and 2023, 18,000 units. c. Which mcthod used to calculate depreciation on Machine B reports the highest amount of deprecia- year 1 (2020)? The highest amount in year 4 (2023)? The highest total amount over tion сxрense in
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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P9.3 (b and c)
Transcribed Image Text:b. Calculate the amount of depreciation expense that Pele should record for Machine B cach year of its
useful life under the following assumptions.
1. Pele uses the straight-line method of depreciation.
2. Pele uses the declining-balance method. The rate used is twice the straight-line rate.
3. Pele uses the units-of-activity method and estimates that the useful life of the machine is
125,000 units. Actual usage is as follows: 2020, 42,000 units; 2021, 37,000 units; 2022,
28,000 units; and 2023, 18,000 units.
c. Which mcthod used to calculate depreciation on Machine B reports the highest amount of deprecia-
year 1 (2020)? The highest amount in year 4 (2023)? The highest total amount over
tion
сxрense
in
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