Question
In: Accounting
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the...
Depreciation Methods
Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates:
| Service life | 5 years or 10,000 hours |
| Production | 180,000 units |
| Residual value | $ 18,000 |
In 2016, Gruman uses the machine for 2,000 hours and produces 40,000 units. In 2017, Gruman uses the machine for 1,400 hours and produces 32,000 units. If required, round your final answers to the nearest dollar.
Required:
Compute the depreciation for 2016 and 2017 under each of the following methods:
Straight-line method
| 2016 | $ |
| 2017 | $ |
Sum-of-the-years'-digits method
| 2016 | $ |
| 2017 | $ |
Double-declining-balance method
| 2016 | $ |
| 2017 | $ |
Activity method based on hours worked
| 2016 | $ |
| 2017 | $ |
Activity method based on units of output
| 2016 | $ |
| 2017 | $ |
For each method, what is the book value of the machine at the end of 2016? At the end of 2017?
Straight-line method
| 2016 | $ |
| 2017 | $ |
Sum-of-the-years'-digits method
| 2016 | $ |
| 2017 | $ |
Double-declining-balance method
| 2016 | $ |
| 2017 | $ |
Activity method based on hours worked
| 2016 | $ |
| 2017 | $ |
Activity method based on units of output
| 2016 | $ |
| 2017 | $ |
If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000 , what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods?
Depreciation expense
Straight-line method
| 2016 | $ |
| 2017 | $ |
Sum-of-the-years'-digits method
| 2016 | $ |
| 2017 | $ |
Double-declining-balance method
| 2016 | $ |
| 2017 | $ |
Book value
Straight-line method
| 2016 | $ |
| 2017 | $ |
Sum-of-the-years'-digits method
| 2016 | $ |
| 2017 | $ |
Double-declining-balance method
| 2016 | $ |
| 2017 | $ |
Solutions
Expert Solution
explanation
answers for II part
explanation for the II part
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ekkarill92 answered 2 years agoRelated Solutions
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the...
Depreciation Methods
Gruman Company purchased a machine for $198,000 on January 2,
2016. It made the following estimates:
Service life
5 years or 10,000 hours
Production
180,000 units
Residual value
$ 18,000
In 2016, Gruman uses the machine for 1,700 hours and produces
45,000 units. In 2017, Gruman uses the machine for 1,200 hours and
produces 32,000 units. If required, round your final answers to the
nearest dollar.
If Gruman used a service life of 8 years or 15,000 hours...
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the...
Depreciation Methods Gruman Company purchased a machine for
$198,000 on January 2, 2016. It made the following estimates:
Service life 5 years or 10,000 hours Production 180,000 units
Residual value $ 18,000 In 2016, Gruman uses the machine for 2,000
hours and produces 40,000 units. In 2017, Gruman uses the machine
for 1,400 hours and produces 32,000 units. If required, round your
final answers to the nearest dollar.
Required: Compute the depreciation for 2016 and 2017 under each
of the...
Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates:...
Gruman Company purchased a machine for $198,000 on January 2,
2016. It made the following estimates:
Service life
5 years or 10,000 hours
Production
180,000 units
Residual value
$ 18,000
In 2016, Gruman uses the machine for 2,000 hours and produces
40,000 units. In 2017, Gruman uses the machine for 1,200 hours and
produces 30,000 units. If required, round your final answers to the
nearest dollar.
Compute the depreciation for 2016 and 2017 under each of the
following methods:
Straight-line...
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Service life
5 years or 10,000 hours
Production
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Residual value
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In 2019, Gruman uses the machine for 2,000 hours and produces
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produces 32,000 units. If required, round your final
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Required:
Compute the depreciation for 2019 and 2020 under each of the
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Service life
5 years or 10,000 hours
Production
200,000 units
Residual value
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In 2016, Gruman uses the machine for 1,800 hours and produces
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Required:
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Estimated service life
16 years, 80,000 hours, or 750,000 units of output
Estimated residual value
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During 2016 and 2017,
the company used the machine for 4,500 and 5,500 hours,
respectively, and produced 40,000 and 60,000 units,
respectively.
2016
2017
Straight-line method
$
$
Activity method (hours worked)
$
$
Activity method (units of output)
$
$
Sum-of-the-years'-digits method
$
$
Double-declining-balance...
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Estimated residual value
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