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 1 year 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
yrs
$__________ ...
On January 1, 2018, A Co. purchased a machine at a cost of $84,000. The machine...
On January 1, 2018, A Co. purchased a machine at a cost of
$84,000. The machine is expected to last 5 years and has a residual
value of $14,000.
Required:
1. Compute depreciation for the five year periods ending
December 31 using the straight-line, sum-of-the-years digits and
DDB method.
2. The machine is sold on January 1,2020 for $40,000. Compute
the gain or loss for each method.
On January 1, 2018, A Co. purchased a machine at a cost of $84,000. The machine...
On January 1, 2018, A Co. purchased a machine at a cost of
$84,000. The machine is expected to last 5 years and has a residual
value of $14,000.
Required:
1. Compute depreciation for the five year periods ending
December 31 using the straight-line, sum-of-the-years digits and
DDB method.
straight-line:
sum-of-the-years digits:
DDB method:
2. The machine is sold on January 1,2020 for $40,000. Compute
the gain or loss for each method.
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...
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