Moore, Inc

Essay

Moore, Inc. purchased slot machines at the beginning of 2015 for $20,000. The machines have an estimated residual value of $2,000 and an estimated life of 5 years or 20,000 hours of operation. Moore is looking at alternative depreciation methods for the equipment. Calculate the following:
A. Accumulated depreciation at December 31, 2016, using the straight-line depreciation method.
B. Depreciation expense for 2015 using the units-of-production depreciation method. Assume that the machines are operated for 5,000 hours in 2015 and 2,000 hours in 2016.
C. Book value of the equipment at December 31, 2016, using the double-declining-balance depreciation method.
D. What are the advantages of using straight-line depreciation for financial reporting purposes?