In recent years, Letterman Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning the machines is summarized below.
For the declining-balance method, the company uses the double-declining rate. For the of- units of activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years were: 2002, 1,000; 2003, 4,500; and 2004, 5,000.
Instructions In Microsoft Excel
(a) Compute the amount of accumulated depreciation on each machine at December 31, 2002.
(b) If machine 2 had been purchased on April 1 instead of January 1, what would be the depreciation expense for this machine in (1) 2000 and (2) 2001?