FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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Transcribed Image Text:Depreciation Methods
Gruman Company purchased a machine for $220,000 on January 2, 2019. It made the following estimates:
Service life
5 years or 10,000 hours
Production
200,000 units
Residual value
$20,000
In 2019, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2020, 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 2019 and 2020 under each of the following methods:
a. Straight-line method
2019 $
40,000
2020 $
40,000
b. Sum-of-the-years'-digits method
2019 $
2020 $
Doubla-daclining-halance method
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