On January 1, 2017, B Company purchased two machines for use in its production process....
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On January 1, 2017, B Company purchased two machines for use in its production process. Machine B:The recorded cost of this machine was $120,000. Dill estimates that the useful life of the machine is 4 years with a $8,000 salvage value remaining at the end of that time period. (a) Calculate the amount of depreciation expense that should be recorded for Machine Beach year of its useful life under the following assumption. (1) Company uses the straight-line method of depreciation. (2) Company uses the declining-balance method. The rate used is twice the straight-line rate (3) Company uses the units-of-activity method and estimates the useful life is 25,000 units. Actual usage: 2017- 5,500 units; 2018-7,000 units; 2019 8,000 units; 2020 4,500 units. (b) Which method used to calculate depreciation on Machine B reports the lowest amount of depreciation expense in year 1 (2017)? The lowest amount in year 4 (2018)? The lowest total amount over the 4 year period? alue at Year Beginning of Year DDB Rate 2015 2016 2017 2018 Expense Depreciation Year
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