Waterway Manufacturing purchased a machine on January 1, 2017 for use in its factory. Waterway paid $130,000 for the machine and estimated that it had a useful life of 4 years, at the end of which time the machine was expected to have a residual value of $20,000. During its life, the machine was expected to produce 220,000 units. During 2017, the machine produced 22,100 units, and produced 33,100 in 2018. The machine was subject to a 20% CCA rate, and Waterwayâs year-end was December 31.
a) Calculate the annual depreciation amount for 2017 and 2018 under the straight-line method.
b) Calculate the annual depreciation amount for 2017 and 2018 under the activity method.
c) Calculate the annual depreciation amount for 2017 and 2018 under the double-declining balance method.
d) Calculate the annual depreciation amount for 2017 and 2018 under the capital cost allowance method.
Waterway Manufacturing purchased a machine on January 1, 2017 for use in its factory. Waterway paid $130,000 for the machine and estimated that it had a useful life of 4 years, at the end of which time the machine was expected to have a residual value of $20,000. During its life, the machine was expected to produce 220,000 units. During 2017, the machine produced 22,100 units, and produced 33,100 in 2018. The machine was subject to a 20% CCA rate, and Waterwayâs year-end was December 31.
a) Calculate the annual depreciation amount for 2017 and 2018 under the straight-line method.
b) Calculate the annual depreciation amount for 2017 and 2018 under the activity method.
c) Calculate the annual depreciation amount for 2017 and 2018 under the double-declining balance method.
d) Calculate the annual depreciation amount for 2017 and 2018 under the capital cost allowance method.
Related questions
| Bluejay Companypurchased a new machine on October 1, 2017, 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 hoursduring its 8-year life. | |||||||||
| Compute depreciation using thefollowing methods in the year indicated. | |||||||||
| 1 | Straight-line method: | 2017 | 2018 | ||||||
| Straight-line for 2017 and 2018, assuming aDecember 31 year-end. | |||||||||
| 2 | Double-declining-balance method: | ||||||||
| Declining-balance using double the straight-linerate for 2017 and 2018. | |||||||||
| 3 | Double-declining-balance method: | ||||||||
| Units-of-activity for 2017, assuming machine usagewas 2,900 hours. | |||||||||
| (Round depreciation per unit to the nearestcent.) | |||||||||
