Question
In: Accounting
5. A machine was acquired on January 1, 2018, at a cost of $80,000. The machine...
5. A machine was acquired on January 1, 2018, at a cost of $80,000. The machine was originally estimated to have a residual value of $5,000 and an estimated life of 5 years. The machine is expected to produce a total of 100,000 components during its life, as follows: 15,000 in 2018, 20,000 in 2019, 20,000 in 2020, 30,000 in 2021, and 15,000 in 2022.
Instructions
(a) Calculate the amount of depreciation to be charged each year, using each of the following methods :
1. Straight-line method
2. Units-of-production
3. Double diminishing-balance
(b) Which method results in the highest depreciation expense during the first two years? Over all five years?
Solutions
Expert Solution
B. Double declining balance method has highest depreciation for two years i,e $ 51,200 .
ekkarill92 answered 10 months agoRelated Solutions
A machine was acquired on January 1, 2015, at a cost of $80,000. The machine was...
A machine was acquired on January 1, 2015, at a cost of $80,000.
The machine was originally estimated to have a residual value of
$5,000 and an estimated life of 5 years. The machine is expected to
produce a total of 100,000 components during its life, as follows:
15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and
15,000 in 2019.
Instructions
(a) Calculate the amount of depreciation to be charged
each year, using each of the...
Question 4 A machine was acquired on January 1, 2015, at a cost of $80,000. The...
Question 4
A machine was acquired on January 1, 2015, at a cost of $80,000.
The machine was originally estimated to have a residual value of
$5,000 and an estimated life of 5 years. The machine is expected to
produce a total of 100,000 components during its life, as follows:
15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and
15,000 in 2019.
Instructions
(a) Calculate the amount of depreciation to be
charged each year, using each...
Question 4 A machine was acquired on January 1, 2015, at a cost of $80,000. The...
Question 4
A machine was acquired on January 1, 2015, at a cost of $80,000.
The machine was originally estimated to have a residual value of
$5,000 and an estimated life of 5 years. The machine is expected to
produce a total of 100,000 components during its life, as follows:
15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and
15,000 in 2019.
Instructions
(a) Calculate the amount of depreciation to be
charged each year, using each...
Best Company acquired a machine on January 1, 2018, that cost $40,000 and had an estimated...
Best Company acquired a machine on January 1, 2018, that cost
$40,000 and had an estimated residual value of $4,000. Complete the
following schedule (for 2018) using the three methods of
depreciation:
straight-line, B.) units-of-production, C.) declining-balance
at 150% acceleration rate.
(Round to the nearest dollar).
Income
Statement
Balance Sheet
Method
Useful
Life
2018
Expense 2018
Accum. Deprec.
SL
5
yrs
$__________
$__________
Units Prod.
8,000 units
$__________
$__________
(2018 Actual 2,000 units)
200%
DB
5
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$__________ ...
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...
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 $36,500. Its estimated residual value was
$11,500 at the end of an estimated 5-year life. The company expects
to produce a total of 10,000 units. The company produced 1,350
units in 2018 and 1,800 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...
Duval Company acquired a machine on January 1, 2018, that costs $2,700 and has an estimated...
Duval Company acquired a machine on January 1, 2018, that costs
$2,700 and has an estimated residual value of $200. Required a)
Complete the following schedule for 2019 using: A) straight-line,
B) units-ofproduction, C) double declining-balance Method Estimated
Useful Life or Units Depreciation Expense for 2019 Accumulated
Depreciation at 12/31/2019 A SL 5 years B UOP 10,000 units
(estimated total) 1,000 units (actual year 2018) 1,200 units
(actual year 2019) C DB 5 years b) Duval estimates the future cash...
MTM Ltd acquired a machine with an original cost of R900 000 on 1 January 2017....
MTM Ltd acquired a machine with an
original cost of R900 000 on 1 January 2017. The machine has a
five-year life and an estimated salvage value of 100 000.
a) Compute depreciation for 2017 and
2018 under each of the following methods:
i. Sum-of-years’ digits
ii. Double declining balance
iii. Straight line
b) Compare the impact of the straight
line and double-declining balance method on each of the
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ii....
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