Jensen Company Purchased a New Machine on October 1, 2014

Jensen Company purchased a new machine on October 1, 2014, at a cost of $104,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 80,000 working hours during its 8-year life.
Instructions
Compute depreciation using the following methods in the year indicated.
(a) Straight-line for 2014 and 2015, assuming a December 31 year-end.
(b) Declining-balance using double the straight-line rate for 2014 and 2015.
(c) Units-of-activity for 2014, assuming machine usage was 2,900 hours. (Round depreciation per unit to the nearest cent.)

Correct Answer:

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