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Determine the amount of depreciation expense

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Reference no: EM132770767

Question - McKean Company purchased a new machine on September 3, 2020, at a cost of $150,000. The machine is expected to have an eight-year life and a $15,000 salvage value. The machine is expected to produce 675,000 finished products during its eight-year life. Production during 2020 was 70,000 units and during 2021 was 110,000 units. McKean depreciates its plant assets using the mid-month convention. McKean closes its books every December 31.

Required - Determine the amount of depreciation expense to be recorded for the machine for years 2020 and 2021 under each of the following methods:

1. Sum-of-the-years'-digits

2. Usage Method (production, units)

Reference no: EM132770767

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