Grumpy Inc purchased a machine on January 1, 2021, at a cost of
$120,000. The machine was originally estimated to have a salvage
value of $15,000 and an estimated life of 3 years. The machine is
expected to produce a total of 100,000 components during its life,
distributed as follows, 40,000 in 2021, 35,000 in 2022, and 25,000
in 2023.
Required:
a) Calculate the amount of depreciation to be charged in each of
the three years, using each of the following methods.
i)
Straight-line method
ii)
Units of activity
iii)
Declining balance at a rate of 200%
b) Which method results in the highest depreciation expense:
i)
During the first two years?
i)
Over all three years?
Grumpy Inc purchased a machine on January 1, 2021, at a cost of $120,000. The machine was originally estimated to have a
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answerhappygod
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Grumpy Inc purchased a machine on January 1, 2021, at a cost of $120,000. The machine was originally estimated to have a
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