Question - Hearsa Manufacturing Inc. purchased a new machine on January 2, 2008, that was built to perform one function on its assembly line. Data pertaining to this machine are:

Acquisition cost                   $330,000

Residual value                    $30,000

Estimated service life:

Years                                 5

Service hours                     250,000

Production output                300,000

Using each of the following methods, compute the annual depreciation rate and charge for the years ended December 31, 2008 and 2009:

(1) Straight-line

(2) Service hours (assume 32,000 hours for 2008 and 36,000 hours for 2009).

(3) Productive-output (assume 31,000 units for 2008 and 37,000 units for 2009).