Question

In: Accounting

A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an...

A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an estimated life of 6 years or 18,863 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 4,557 hours?

Select the correct answer.

$20,235.00

$15,745.97

$10,117.50

$14,665.36

Solutions

Expert Solution

WORKING NOTES:
CALCULATION OF THE DEPRECIATION AS PER UOP METHOD
Purchase Cost of Machine $                     65,178
Less: Salvage Value = $                        4,473
Net Value for Depreciation (A) $                     60,705
Expected to Produce Hours (B)                          18,863 Hours
Depreciation per Hours = (A/B) $                        3.218 Per Hours
SOLUTION =
CALCUATION OF DEPRECIATION EXPENSES OF YEAR 2
Year   Assets Cost Machine Hours Used X Rate Per Hours = Depreciaiton Expenses
Purchase Price                            65,178
Year 2                     4,557 X                  3.218 = $         14,665.36
Answer = Option 4 = $ 14,665.36

Related Solutions

A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful...
A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses double-declining-balance depreciation. Required: 1. Calculate the machine's depreciable cost. 2. Calculate the machine's depreciation expense for each year. 3. Calculate the machine's accumulated depreciation and book value at the end of each year.
A three-year-old machine has a cost of $19,100, an estimated residual value of $2,600, and an...
A three-year-old machine has a cost of $19,100, an estimated residual value of $2,600, and an estimated useful life of 33,000 machine hours. The company uses units-of-production depreciation and ran the machine 4,400 hours in year 1; 8,050 hours in year 2; and 8,200 hours in year 3. Calculate the net book value at the end of the third year.
A building with a cost of $225,000 has an estimated residual value of $45,000, has an...
A building with a cost of $225,000 has an estimated residual value of $45,000, has an estimated useful life of 9 years, and is depreciated by the straight-line method. a. What is the amount of the annual depreciation? $ b. What is the book value at the end of the fifth year of use? $ c. If at the start of the sixth year it is estimated that the remaining life is 5 years and that the residual value is...
A truck acquired at a cost of $260,000 has an estimated residual value of $12,550, has...
A truck acquired at a cost of $260,000 has an estimated residual value of $12,550, has an estimated useful life of 49,000 miles, and was driven 3,900 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $ (b) The depreciation rate $ per mile (c) The units-of-activity depreciation for the year $
A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of $5,200
A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of $5,200, and an estimated useful life of 12 years.what is the amount of the annual depreciation computed by the straight line method?
Jackson’s Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value...
Jackson’s Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Jackson’s Corporation uses the units-of- production method to account for the depreciation on the equipment. 1.) Will...
Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value...
Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Trainor Corporation uses the units-of- production method to account for the depreciation on the equipment. Based on...
An asset cost $13,000; estimated residual value, $1,000, and estimated life: Estimated Life Actual usage In...
An asset cost $13,000; estimated residual value, $1,000, and estimated life: Estimated Life Actual usage In years 5 In running time (hours) 3,000 hrs. Year 1 = 700 hrs. Year 2 = 3200 hrs. In productive output (units) 10,000 units Year 1 = 2000 units Year 2 = 5000 units Straight Line Year Depreciation Expense Accumulated Depreciation Cost Net Book Value Yr. 1 13,000 Yr. 1 end Yr. 2 Service Hours Year Depreciation Expense Accumulated Depreciation Cost Net Book Value...
Jaguar Corporation purchased a machine that had an original cost of $60,000 and an estimated residual...
Jaguar Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000. The useful life was expected to be 8 years and straight-line depreciation is used. At December 31, 2006 (Jaguar’s annual year-end), the book value of the machine was $35,000. Jaguar Corporation sold the machine for $32,000 cash on October 1, 2007. Required: (A) Prepare the journal entry to record depreciation expense for 2007 at Oct 1, 2007 for the machine. Round...
Partial-Year Depreciation Equipment acquired at a cost of $99,000 has an estimated residual value of $6,000...
Partial-Year Depreciation Equipment acquired at a cost of $99,000 has an estimated residual value of $6,000 and an estimated useful life of 10 years. It was placed into service on April 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Depreciation Year 1 $ Year 2 $ b. Determine the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT