On January 1, 2016, Amethyst Manufacturing Corporation purchased a machine for $40,000,000

The corporation expects to use the machine for 24,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $40,000. The schedule of usage of the machine is below.

Year Usage
1 4,500
2 6,000
3 5,200
4 4,300
5 2,000
6 2,000

Prepare the depreciation schedule using the units-of-production method of depreciation.
What will be an ideal response

Depreciation for the year
Depre- Number Depre-
ciation of ciation Accumulated Book
Date Asset cost per hour hours expense depreciation value
1-1-2016 $40,000,000 $40,000,000
12-31-2016 $1,665 4,500 $7,492,500 $7,492,500 32,507,500
12-31-2017 1,665 6,000 9,990,000 17,482,500 22,517,500
12-31-2018 1,665 5,200 8,658,000 26,140,500 13,859,500
12-31-2019 1,665 4,300 7,159,500 33,300,000 6,700,000
12-31-2020 1,665 2,000 3,330,000 36,630,000 3,370,000
12-31-2021 1,665 2,000 3,330,000 39,960,000 40,000

Depreciation per hour = ($40,000,000 - $40,000 ) / 24,000 hours = $1,665 per hour