ACC 281 P10-3A On January 1 2008 Pele Company purchased the following two machin

ACC 281 P10-3A On January 1 2008 Pele Company purchased
the following two machines for use in its production processFinancial Accounting Transaction Analysis: Weygandt J. J.
Kimmel P. D. & Kieso D. E. (2008). Financial Accounting (6th ed.).
Hoboken NJ: Wiley.Axia College of University of Phoenix (UoP)ACC 281 Week ThreeLearning Team AssignmentP10-3A Compute depreciation under different methods.On January 1 2008 Pele Company purchased the following two
machines for use in its productionprocess.Machine A: The cash price of this machine was $38000.
Related expenditures included: sales tax $1700 shipping costs $150 insurance
during shipping $80 installation and testing costs $70 and $100 of oil and
lubricants to be used with the machinery during its first year of operations.
Pele estimates that the useful life of the machine is 5 years with a $5000
salvage value remaining at the end of that time period. Assume that the
straight-line method of depreciation is used.Machine B: The recorded cost of this machine was $160000.
Pele estimates that the useful life of the machine is 4 years with a $10000
salvage value remaining at the end of that time period.Instructions(a) Prepare the following for Machine A.(1) The journal entry to record its purchase on January 1
2008.(2) The journal entry to record annual depreciation at
December 31 2008.(b) Calculate the amount of depreciation expense that Pele
should record for machine B each year ofits useful life under the following assumptions.(1) Pele uses the straight-line method of depreciation.(2) Pele uses the declining-balance method. The rate used is
twice the straight-line rate.(3) Pele uses the units-of-activity method and estimates
that the useful life of the machine is 125000 units. Actual usage is as
follows: 2008 45000 units; 2009 35000 units; 2010 25000 units; 2011
20000 units.(c) Which method used to calculate depreciation on machine B
reports the highest amount of depreciation expense in year 1 (2008)? The
highest amount in year 4 (2011)? The highest total amount over the 4-year
period?