Question
In: Accounting
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1,...
|
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, 2016: |
| Purchase price | $ | 82,500 | |
| Delivery cost | $ | 3,000 | |
| Installation charge | $ | 1,000 | |
| Estimated life | 5 | years | |
| Estimated units | 157,000 | ||
| Salvage estimate | $ | 8,000 | |
| During 2016, the machine produced 53,000 units and during 2017, it produced 55,000 units. |
| Required: |
| a. |
Determine the amount of depreciation expense for 2016 and 2017 using straight-line method. |
| b. |
Determine the amount of depreciation expense for 2016 and 2017 using double-declining-balance method. |
| c. |
Determine the amount of depreciation expense for 2016 and 2017 using units of production method. |
| d. |
Determine the amount of depreciation expense for 2016 and 2017 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.) |
| MACRS table: |
| Year | 5-Year property,% | 7-Year property,% | ||||
| 1 | 20.00 | 14.29 | ||||
| 2 | 32.00 | 24.49 | ||||
| 3 | 19.20 | 17.49 | ||||
| 4 | 11.52 | 12.49 | ||||
| 5 | 11.52 | 8.93 | ||||
| 6 | 5.76 | 8.92 | ||||
| 7 | 8.93 | |||||
| 8 | 4.46 | |||||
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1,...
Banko Inc. manufactures sporting goods. The following
information applies to a machine purchased on January 1, Year 1:
Purchase price $ 91,000 Delivery cost $ 5,000 Installation charge $
3,000 Estimated life 5 years Estimated units 160,000 Salvage
estimate $ 3,000 During Year 1, the machine produced 56,000 units
and during Year 2, it produced 58,000 units. Required Determine the
amount of depreciation expense for Year 1 and Year 2 using each of
the following methods:
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1,...
Banko Inc. manufactures sporting goods. The following
information applies to a machine purchased on January 1, 2018:
Purchase price
$
71,000
Delivery cost
$
3,000
Installation charge
$
2,000
Estimated life
5
years
Estimated units
146,000
Salvage estimate
$
3,000
During 2018, the machine produced 42,000 units and during 2019,
it produced 44,000 units.
Required
Determine the amount of depreciation expense for 2018 and 2019
using each of the following methods:
2018
2019
a.
Straight-line
not attempted
not attempted
b....
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1,...
Banko Inc. manufactures sporting goods. The following
information applies to a machine purchased on January 1, Year
1:
Purchase price
$
91,000
Delivery cost
$
5,000
Installation charge
$
3,000
Estimated life
5
years
Estimated units
160,000
Salvage estimate
$
3,000
During Year 1, the machine produced 56,000 units, and during Year 2
it produced 58,000 units.
Required
a. Determine the amount of depreciation expense
for Year 1 and Year 2 using straight-line method.
b. Determine the amount of depreciation...
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1,...
Banko Inc. manufactures sporting goods. The following
information applies to a machine purchased on January 1, Year
1:
Purchase price
$
61,000
Delivery cost
$
5,000
Installation charge
$
1,000
Estimated life
5
years
Estimated units
155,000
Salvage estimate
$
5,000
During Year 1, the machine produced 51,000 units, and during Year 2
it produced 53,000 units.
Required
a. Determine the amount of depreciation expense
for Year 1 and Year 2 using straight-line method.
b. Determine the amount of depreciation...
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1,...
Banko Inc. manufactures sporting goods. The following
information applies to a machine purchased on January 1, 2016
Purchase
price
$
67,000
Delivery cost
$
6,000
Installation
charge
$
3,000
Estimated life
5
years
Estimated units
144,000
Salvage estimate
$
4,000
During 2016, the machine produced
40,000 units and during 2017, it produced 42,000 units.
Required:
a.
Determine the amount of depreciation expense for 2016 and 2017
using straight-line method.
b.
Determine the amount of depreciation expense for 2016 and...
Stahn Inc., an oil production company, purchased a machine on January 1, 2018. The following information...
Stahn Inc., an oil production company, purchased a machine on
January 1, 2018. The following information applies:
Cost
Estimated useful life
Residual value
$40,000
3 years
$4,000
The year-end of the company is December 31.
Required:
1.
Calculate the depreciation expense and the carrying amount at
year-end for the three-year period using the straight-line and
double-declining balance methods.
2.
Assume depreciation has been recorded using the double-declining
balance method. The machine is obsolete at the end of two years and...
1. On January 1, 2015, Reno Inc. purchased a machine for $150,000. The machine has an...
1. On January 1, 2015, Reno Inc. purchased a machine for
$150,000. The machine has an estimated five year life, and no
residual value. Double declining balance depreciation has been used
for financial statement reporting and CCA for income tax reporting.
Effective January 1, 2018, Reno decided to change to straight-line
depreciation for this machine, and treated the change as a change
in accounting policy. For calendar 2018, Reno’s pre-tax income
before depreciation on this asset is $125,000. Their
income...
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
cost of the machine was $30,500. Its estimated residual value was
$9,500 at the end of an estimated 5-year life. The company expects
to produce a total of 10,000 units. The company produced 1,150
units in 2018 and 1,600 units in 2019.
Required:
a. Calculate depreciation expense for 2018 and 2019 using the
straight-line method.
b. Calculate the depreciation expense for 2018 and 2019 using
the units-of-production method.
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
cost of the machine was $32,000. Its estimated residual value was
$10,000 at the end of an estimated 5-year life. The company expects
to produce a total of 20,000 units. The company produced 1,200
units in 2018 and 1,650 units in 2019.
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...
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
cost of the machine was $38,000. Its estimated residual value was
$12,000 at the end of an estimated 5-year life. The company expects
to produce a total of 20,000 units. The company produced 1,400
units in 2018 and 1,850 units in 2019.
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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