Question

heffield Company purchased machinery on January 1, 2020, for $93,600. The machinery is estimated to have a salvage value of $9,360 after a useful life of 8 years.

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Compute 2020 depreciation expense using the sum-of-the-years'-digits method.

Depreciation expense

$enter Depreciation expense in dollars

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New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute 2020 depreciation expense using the sum-of-the-years'-digits method, assuming the machinery was purchased on April 1, 2020. (Round answer to 0 decimal places, e.g. 5,125.)

Depreciation expense

$enter Depreciation expense in dollars rounded to 0 decimal places

Answer 1

Solution:

Requirement: 1 Depreciation expense using the sum-of-the-years'-digits method.

Depreciation Expense = $ 18,720

No.	Account Titles and Explanation	Debit	Credit
1	Depreciation Expense [(93600-9360)*8/36]	$    18,720.00
	Accumulated Depreciation- Machinery		$       18,720.00
	(To record depreciation expense)

Requirement: 2 Depreciation expense using the sum-of-the-years'-digits method, assuming the machinery was purchased on April 1, 2020.

Depreciation Expense = $ 14,040

No.	Account Titles and Explanation	Debit	Credit
2	Depreciation Expense [(93600-9360)*8/36*9/12]	$    14,040.00
	Accumulated Depreciation- Machinery		$       14,040.00
	(To record depreciation expense)

Notes:

1) Under Requirement: 2, depreciation is calculated for 9 months because it is purchased in april.