Question
In: Finance
You are a financial analyst for Loch Motor Company and have been asked to determine the...
You are a financial analyst for Loch Motor Company and have been
asked to determine the impact of alternative depreciation methods.
For your analysis, you have been asked to compare methods based on
a machine that cost $206,000. The estimated useful life is 12
years, and the estimated residual value is $46,160. The machine has
an estimated useful life in productive output of 222,000 units.
Actual output was 31,000 in year 1 and 27,000 in year 2.
Required:
1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.)
| Year | Deprecation expense | accumulated deprecation | net book vaule |
| at acquistion | |||
| 1 | |||
| 2 |
a. Straight-line method.
b. Units-of-production method.
c. Double-declining-balance method.
Solutions
Expert Solution
Depreciation under
Double declining balance method = 2*SLM (straight line method)
In double declining method deprecation is charged until the asset value reaches its residual value.
jeff jeffy answered 2 hours agoRelated Solutions
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