Question
In: Accounting
Millco, Inc., acquired a machine that cost $544,000 early in 2016. The machine is expected to...
Millco, Inc., acquired a machine that cost $544,000 early in 2016. The machine is expected to last for eighth years, and its estimated salvage value at the end of its life is $75,000. Required:
a. Using straight-line depreciation, calculate the depreciation expense to be recognized in the first year of the machine's life and calculate the accumulated depreciation after the fifth year of the machine's life. Depreciation expense Accumulated depreciation
b. Using declining-balance depreciation at twice the straight-line rate, calculate the depreciation expense for the third year of the machine's life.
c. What will be the net book value of the machine at the end of its eighth year of use before it is disposed of, under each depreciation method? Straight-line depreciation Declining-balance depreciation
Solutions
ekkarill92 answered 7 months agoRelated Solutions
Millco, Inc., acquired a machine that cost $600,000 early in 2016. The machine is expected to...
Millco, Inc., acquired a machine that cost $600,000 early in
2016. The machine is expected to last for eighth years, and its
estimated salvage value at the end of its life is $80,000.
Required:
a. Using straight-line depreciation, calculate the
depreciation expense to be recognized in the first year of the
machine's life and calculate the accumulated depreciation after the
fifth year of the machine's life.
b. Using declining-balance depreciation at twice the
straight-line rate, calculate the depreciation expense for...
Lone Star Sales & Service acquired a new machine that cost $84,000 in early 2019. The...
Lone Star Sales & Service acquired a new machine that cost
$84,000 in early 2019. The machine is expected to have a five-year
useful life and is estimated to have a salvage value of $14,000 at
the end of its life. (Round your final answers to the nearest
dollar.)
(a.) Using the straight-line depreciation method, calculate the
depreciation expense to be recognized in the second year of the
machine's life and calculate the accumulated depreciation after the
third year of...
Wildcat, Inc. purchases a machine on January 1, 2016 at a cost of $555,000. The machine will...
Wildcat, Inc. purchases a machine on January 1, 2016 at a cost
of $555,000. The machine will be depreciated over a
8-year useful life by using the double-declining balance
method. The managers estimate that the machine will have
a salvage value of $50,00 at the end of its useful
life. What is the machine's carrying amount at December
31, 2018?
a.
$416,250
b.
$312,188
c.
$234,141
d.
$175,605
Mercury Inc. purchased equipment in 2016 at a cost of $249,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2016 at a cost of $249,000.
The equipment was expected to produce 510,000 units over the next
five years and have a residual value of $45,000. The equipment was
sold for $134,800 part way through 2018. Actual production in each
year was: 2016 = 71,000 units; 2017 = 114,000 units; 2018 = 58,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Prepare the journal entry to...
Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020: MILLCO...
Following are comparative balance sheets for Millco Inc. at
January 31 and February 28, 2020:
MILLCO INC.
Balance Sheets
February 28 and January 31, 2020
February 28
January 31
Assets
Cash
$
50,400
$
44,400
Accounts receivable
76,800
63,600
Merchandise inventory
97,200
112,800
Total current assets
$
224,400
$
220,800
Plant and equipment:
Production equipment
199,200
182,400
Less: Accumulated depreciation
(28,800
)
(25,200
)
Total assets
$
394,800
$
378,000
Liabilities
Accounts payable
$
44,400
$
49,200
Short-term debt
52,800...
Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020: MILLCO...
Following are comparative balance sheets for Millco Inc. at
January 31 and February 28, 2020:
MILLCO INC.
Balance Sheets
February 28 and January 31, 2020
February 28
January 31
Assets
Cash
$
33,600
$
29,600
Accounts receivable
51,200
42,400
Merchandise inventory
64,800
75,200
Total current assets
$
149,600
$
147,200
Plant and equipment:
Production equipment
132,800
121,600
Less: Accumulated depreciation
(19,200
)
(16,800
)
Total assets
$
263,200
$
252,000
Liabilities
Accounts payable
$
29,600
$
32,800
Short-term debt
35,200...
Goff Corporation acquired stock of Spiegel, Inc., on March 1, 2016, at a cost of $500,000....
Goff Corporation acquired stock of Spiegel, Inc., on March 1,
2016, at a cost of $500,000. The stock had a fair value of $550,000
at December 31, 2016, $610,000 at December 31, 2017, and $590,000
at December 31, 2018. Goff sold the stock for $640,000 on July 1,
2019. Spiegel did not pay any dividends during the time Goff held
the stock.
When Goff acquired the stock, it classified the investment as
available-for-sale. However, Goff transitioned to the new
accounting...
A machine was acquired on January 1, 2015, at a cost of $80,000. The machine was...
A machine was acquired on January 1, 2015, at a cost of $80,000.
The machine was originally estimated to have a residual value of
$5,000 and an estimated life of 5 years. The machine is expected to
produce a total of 100,000 components during its life, as follows:
15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and
15,000 in 2019.
Instructions
(a) Calculate the amount of depreciation to be charged
each year, using each of the...
Austin Jack Inc.” is considering the following machines Machine A Machine B Cost $500,000 $260,000 Expected...
Austin Jack Inc.” is considering the following machines
Machine A Machine B
Cost $500,000 $260,000
Expected Life 6 years 3 years
CF/Year $220,000 $200,000
Assume that the cost of capital is 12 percent.
15. What is the NPV for project A? *
A. $380,605
B. $404,510
C. $905,215
D. $510,000
E. None of the above
16. What is the NPV for project B? *
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B. $480,366
C. $740,366
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E. None of the above
17. What is...
Man-U-Facturing Inc. will buy a machine that has a cost of $850,000 and is expected to...
Man-U-Facturing Inc. will buy a machine that has a cost of
$850,000 and is expected to be useful for 10 years. At the end of
the 10th year, the firm intends to sell the machine for an
estimated price of $52,036. In addition, the yearly benefits are
expected to be $201,952 while the annual maintenance costs are
predicted to be $51,300. The company uses a 9% interest rate for
this project and it is currently being taxed at a flat...
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