Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2007. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2008 Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units.
Instructions From the information given, compute the depreciation charge for 2008 under each of the following
methods. (Round to the nearest dollar.)
(c) Working hours.
(e) Declining-balance (use 20% as the annual rate).
Your tutorial is in Excel (attached) and shows you the equations and the computations for each method. The accelerated methods require pro-rating of the partial year in 2007 and the way to do this is shown for you.