Question
In: Accounting
Required information [The following information applies to the questions displayed below.] On January 1, 2021, the...
Required information
[The following information applies to the questions
displayed below.]
On January 1, 2021, the Allegheny Corporation purchased equipment
for $127,000. The estimated service life of the equipment is 10
years and the estimated residual value is $6,000. The equipment is
expected to produce 224,000 units during its life.
Required:
Calculate depreciation for 2021 and 2022 using each of the
following methods.
2. One hundred fifty percent declining balance. (Round final answers to the nearest whole dollar amount.)
Solutions
Expert Solution
| WORKING NOTES: | |||||
| CALCULATION OF THE DEPRECIATION AS PER SUM OF DOUBLE DECLINE METHOD | |||||
| Purchase Cost of Machine | $ 1,27,000 | ||||
| Useful Life = | 10 years | ||||
| Depreciation per year = | $ 12,700 | ||||
| (Purchase price / Useful life) | |||||
| CALCULATION OF THE RATE OF DEPRECIATION | |||||
| Rate of Depreciation = Depreciation per year as above / Purchase price of machiene | |||||
| Rate of Depreciation = | $ 12,700 | "/"By | $ 1,27,000 | ||
| Rate of Depreciation = | 0.10 | ||||
| Rate of Depreciation in percentage = | 10% | ||||
| 150% decline deprection rate | 15% | ||||
| SOLUTION : | |||||
| CALCULATION OF DEPRECIATION FOR THE YEAR 2021 AND 2022 | |||||
| Purchase price = | $ 1,27,000 | ||||
| Depreciation for the year 2021 @ 15% = | $ 19,050 | ||||
| Closing balance for the year 2021 | $ 1,07,950 | ||||
| Opening Balance for the year 2022 | $ 1,07,950 | ||||
| Depreciation for the year 2022 @ 15% = | $ 16,193 | ||||
| Closing balance for the year2022 | $ 91,758 | ||||
| ANSWER: | |||||
| Deoreciation for the year 2021 | $ 19,050 | ||||
| Deoreciation for the year 2022 | $ 16,193 | ||||
ekkarill92 answered 1 year agoRelated Solutions
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Required information [The following information applies to the
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On January 1, 2021, the Allegheny Corporation purchased equipment
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Calculate depreciation for 2021 and 2022 using each of the
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On January 1, 2021, the general ledger of ACME Fireworks
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Accounts Receivable
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