E9-6 Determine depreciation for partial periods

Rottino Company purchased a new machine on October 1, 2015, at a cost of $150,000.

The company estimated that the machine will have a salvage value of $12,000. The
machine is expected to be used for 10,000 working hours during its 5-year life.
Instructions
Compute the depreciation expense under the following methods for the year indicated.
(a) Straight-line for 2015.
(b) Units-of-activity for 2015, assuming machine usage was 1,700 hours.
(c) Declining-balance using double the straight-line rate for 2015 and 2016.

(a) Straight-line method

Cost
Less: Salvage value
Depreciable cost
Useful life (years)
Annual depreciation

2015 Depreciation:
Annual Depreciation
Months machine in use
2015 partial year depreciation
(b) Units-of-activity method
Cost
Less: Salvage value
Depreciable cost
Useful life (hours)
Depreciable cost/hour

2015 Depreciation:
Depreciable cost/hour
Hours machine used
2015 depreciation expense

(c) Declining-balance method:

Straight-line rate
Double the straight-line rate
2015 Depreciation:
Cost
Double the straight-line rate
2015 full year depreciation
Number of months in use
2015 partial year depreciation
2016 Depreciation:
Cost
Less: accumulated depreciation, 2015
Ending book value, 2015

Beginning book value, 2016

Double the straight-line rate
2016 depreciation expense