Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000 In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answers to the nearest dollar. Required: 1. Compute the depreciation for 2016 and 2017 under each of the following methods: a. Straight-line method 2016 $ 40,000 V 2017 $ b. Sum-of-the-years'-digits method 193,333 X 2016 $ 2017 $ c. Double-declining-balance method 2016 $ 2017 $ HArtivitv method hased on hours worked Previous Next

(a.) Straight-line Depreciation Purchase cost of Machine $2,20,000 Less: Residual Value $20,000 Depreciable Value $2,00,000 Useful Life 5 years Annual Depreciation ($200000 / 5 years) $40,000 2016 $40,000 2017 $40,000(b.) Sum-of-the-years- digit method Purchase cost of Machine $2,20,000 Less: Residual Value $20,000 Depreciable Value $2,00,000 Sum of Digit (1+2+3+4+5) 15 2016 ($200000 * 5 /15) $66,667 2017 ($200000 * 4 /15) $53,333(c.) Double-declining balance method Useful Life 5 years Depreciation Rate [2* (1/useful life*100)] [2 * (1 / 4 * 100)] 40% Purchase cost of Machine $2,20,000 2016 ($220000 * 40%) $88,000 2017 [($200000 - $88000) * 40%) $52,800(d.) Activity method based on hours worked Purchase cost of Machine $2,20,000 Less: Residual Value $20,000 Depreciable Value $2,00,000 Useful Life 10,000 hours Depreciation per hour ($200000 / 10000 hours) $20 2016 (1,800 hours * $20) $36,000 2017 (1,500 hours * $20) $30,000