Ivanhoe Ltd. purchased a new machine on April 4, 2017, at a cost of $188,000....
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Ivanhoe Ltd. purchased a new machine on April 4, 2017, at a cost of $188,000. The company estimated that the machine would have a residual value of $16,000. The machine is expected to be used for 10,000 working hours during its four-year life. Actual machine usage was 1,600 hours in 2017; 2,100 hours in 2018; 2,300 hours in 2019;2,100 hours in 2020; and 1,900 hours in 2021. Ivanhoe has a December 31 year end. Calculate depreciation under straight line, diminishing balance and unit of production method.
And which method result in higher depreciation expense over the life of an asset? Highest net income? highest cash flow?
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