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Calculate depreciation expense for the year

On December 31, 20x3, the PPE Company purchased an asset costing $1,000,000. The asset’s useful life is expected to be 10 years with a residual value of $300,000.

a. Calculate the depreciation expense for 20x4 using:

i. the straight line method,

ii. the units of production method. Assume that the useful life of the machine is 250,000 machine hours and that 35,000 machine hours were used in 20x4.

b. Calculate depreciation expense for 20x4 to 20x9 using the diminishing balance method at a rate of 25% per year.

c. Assume the straight line method is used and that the asset is sold on June 30, 20x9 for $450,000. Prepare the journal entry or entries to record the disposal of the asset.

d. Assume that the straight-line method is used. In 20x7, the company estimates that hat the total useful life of the asset is expected to be 15 years with a $100,000 residual value. Calculate depreciation expense for the year 20x7.

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