Foster corporation bought a new machine for its assembly

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Foster Corporation purchased a new machine for its assembly process on August 1, 2014. The cost of this machine was $235,800. The company estimated that the machine would have a trade-in value of $25,800 at the end of its service life. Its life is estimated at 10 years, and its working hours are estimated at 42,000 hours. Year-end is December 31.

Instructions

Compute the depreciation expense under the following methods. Each of the following should be considered unrelated.

(a) Straight-line depreciation for 2014.

(b) Activity method for 2014, assuming that machine usage was 800 hours.

(c) Sum-of-the-years'-digits for 2015.

(d) Double-declining balance for 2015.

Reference no: EM13391434

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