Problem 1- In recent years, Farr Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
| Machine |
Acquired |
Cost |
Salvage
Value |
Useful Life
(in years) |
Depreciation
Method |
| 1 |
Jan. 1, 2012 |
$122,000 |
$19,000 |
10 |
Straight-line |
| 2 |
July 1, 2013 |
87,000 |
10,100 |
5 |
Declining-balance |
| 3 |
Nov. 1, 2013 |
99,180 |
6,780 |
6 |
Units-of-activity |
For the declining-balance method, Farr Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 33,000. Actual hours of use in the first 3 years were: 2013, 850; 2014, 6,330; and 2015, 7,670. Compute the amount of accumulated depreciation on each machine at December 31, 2015.
If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2013? In 2014?