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Acquisition Cost and Depreciation Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the...
Acquisition Cost and Depreciation
Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the machine into production on April 3, 2016. The following information is relevant to Machine #204:
| Price | $60,000 |
| Freight-in costs | 2,500 |
| Preparation and installation costs | 3,900 |
| Labor costs during regular production operation | 10,200 |
| Credit terms | 2/10, n/30 |
| Total productive output | 138,500 units |
The company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille intends to use the machine only 8 years, after which it expects to be able to sell it for $9,800. The invoice for Machine #204 was paid April 10, 2016. The number of units produced in 2016 and 2017 was 23,200 and 29,000, respectively. Reveille computes depreciation expense to the nearest whole month.
Required:
Compute the depreciation expense for 2016 and 2017, using the following methods. Round your answers to the nearest dollar.
Straight-line method:
2016 depreciation = $
2017 depreciation = $
Sum-of-the-years'-digits method:
2016 depreciation = $
2017 depreciation = $
Double-declining-balance method:
2016 depreciation = $
2017 depreciation = $
Activity method (units of production):
2016 depreciation = $
2017 depreciation = $
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Acquisition Cost and Depreciation Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the...
Acquisition Cost and Depreciation Reveille, Inc., purchased
Machine #204 on April 1, 2016, and placed the machine into
production on April 3, 2016. The following information is relevant
to Machine #204: Price $60,000 Freight-in costs 2,500 Preparation
and installation costs 3,900 Labor costs during regular production
operation 10,200 Credit terms 2/10, n/30 Total productive output
138,500 units The company expects that the machine could be used
for 10 years, after which the salvage value would be zero. However,
Reveille intends...
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current year, 12,000 units were produced. Prepare the necessary
December 31 adjusting journal entry to record depreciation for the
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The profit before tax for the company for the year ending 30 June
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Jaguar Ltd purchased a machine on 1 July 2016 at the cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at the cost of
$640,000. The machine is expected to have a useful life of 5 years
(straight-line basis) and no residual value. For taxation purposes,
the ATO allows the company to depreciate the asset over 4 years.
The profit before tax for the company for the year ending 30 June
2017 is $600,000. To calculate this profit the company has deducted
$60,000 entertainment expense, and $80,000 salary expense that has...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of
$640,000. The machine is expected to have a useful life of 5 years
(straight line basis) and no residual value. For taxation purposes,
the ATO allows the company to depreciate the asset over 4
years.
The profit before tax for the company for the year ending 30
June 2017 is $600,000. To calculate this profit the company has
deducted $60,000 entertainment expense, and $80,000 salary expense
that...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of
$640,000. The machine is expected to have a useful life of 5 years
(straight line basis) and no residual value. For taxation purposes,
the ATO allows the company to depreciate the asset over 4 years.
The profit before tax for the company for the year ending 30 June
2017 is $600,000. To calculate this profit the company has deducted
$60,000 entertainment expense, and $80,000 salary expense that...
CONCEPT CHECK for DEPRECIATION Depreciation Methods — Year 1 Cost of machine (purchased Jan 1) 83,000...
CONCEPT CHECK for DEPRECIATION Depreciation Methods — Year 1
Cost of machine (purchased Jan 1) 83,000 Salvage value 3,000 Useful
life in years 5 Useful life in machine hours 100,000 A. Using the
information provided above, calculate this truck’s depreciation for
Year 1 and Year 2 using the following methods: Year 1 Year 2 1.
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________________ _______________ (Year 1 actual hours is 25,000
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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.
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c.
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d.
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Duluth Ranch, Inc. purchased a machine on January 1, 2018. The
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units in 2018 and 1,600 units in 2019.
Required:
a. Calculate depreciation expense for 2018 and 2019 using the
straight-line method.
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c....
Duluth Ranch, Inc. purchased a machine on January 1, 2018. The cost of the machine was...
Duluth Ranch, Inc. purchased a machine on January 1, 2018. The
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Required:
Calculate depreciation expense for 2018 and 2019 using the
straight-line method.
Calculate the depreciation expense for 2018 and 2019 using the
units-of-production method.
Calculate depreciation expense...
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