Question

In: Accounting

Davis machine works purchased a stamping machine $135,000 on March 1, 2007. The machine is expected...

Davis machine works purchased a stamping machine $135,000 on March 1, 2007. The machine is expected to have a useful life of 5 years, salvage value of $12,000, production of 250,000 units, and number of working hours of 30,000. During 2007, Davis used the stamping machine for 2450 hours to produce 23,450 units. From the information given compute the book depreciation expenses for the life of the machine under each of the following methods: (a) straight-line (b) double-declining-balance (without conversion to straight-line depreciation) (c) units of production

Solutions

Expert Solution


Related Solutions

A company is considering the purchase of a large stamping machine that will cost $135,000, plus...
A company is considering the purchase of a large stamping machine that will cost $135,000, plus $6,700 transportation and $12,300 installation charges. It is estimated that, at the end of five years, the market value of the machine will be $52,000. The IRS has established that this machine will fall under a three-year MACRS class life category. The justifications for the machine include $36,000 savings per year in labor and $46,000 savings per year in reduced materials. The before-tax MARR...
Delta Machine Company purchased a computerized assembly machine for $135,000 on January 1, 2018. Delta Machine...
Delta Machine Company purchased a computerized assembly machine for $135,000 on January 1, 2018. Delta Machine Company estimated that the machine would have a life of four years and a $25,000 salvage value. Delta Machine Company uses the straight-line method to compute depreciation expense. At the beginning of year 3 (2020) Delta discovered that the machine was quickly becoming obsolete and would have little value at the end of its useful life. Consequently, Delta Machine Company revised the estimated salvage...
Sterling Steel Inc. purchased a new stamping machine at the beginning of the year at a...
Sterling Steel Inc. purchased a new stamping machine at the beginning of the year at a cost of $720,000. The estimated residual value was $76,800. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 268,000 units. Actual annual production was as follows: Year Units 1 78,000 2 66,000 3 30,000 4 58,000 5 36,000 Complete a separate depreciation schedule for each of the alternative methods. (Round your answers to the nearest...
Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a...
Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $1,000,000. The estimated residual value was $92,800. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 324,000 units. Actual annual production was as follows: Year Units 1 86,000 2 74,000 3 41,000 4 69,000 5 54,000 Required: 1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round your...
Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a...
Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $1,330,000. The estimated residual value was $70,000. Assume that the estimated useful life was five years and the estimated productive life of the machine was 300,000 units. Actual annual production was as follows: Year Units 1 70,000 2 67,000 3 50,000 4 73,000 5 40,000 Required: 1. Complete a separate depreciation schedule for each of the alternative methods. year depreaction expense accumulated...
1. A business purchased a machine for $60,000. The machine is expected to be used for...
1. A business purchased a machine for $60,000. The machine is expected to be used for 8 years, after which it is expected to be sold for $6,000. Using the straight-line depreciation method, how much is the annual depreciation amount? 2. An entity’s financial year ends on 31 December. On 1 October it pays a 24-month magazine subscription of $600. Under the accrual system of accounting how much of the subscription will be recognized as an expense for the current...
"A special-purpose turnkey stamping machine was purchased four years ago for $24,000. It was estimated at...
"A special-purpose turnkey stamping machine was purchased four years ago for $24,000. It was estimated at that time that this machine would have a life of 10 years, a salvage value of $2,000, and a removal cost of $700. These estimates are still good. The machine has annual operating costs of $2,600. A new machine that is more efficient will reduce the operating costs to $1200, but it will require an investment of $24,000 plus $1,900 for installation. The life...
On January 1, 2017, Beard Company purchased a machine for $800,000. The machine is expected to...
On January 1, 2017, Beard Company purchased a machine for $800,000. The machine is expected to have a 10-year life and no residual value. On January 1, 2017, it leased the machine to Ajax Company for a three-year period at an annual rental of $200,000 to be paid at the end of each year. The lease has an implicit interest rate of 8%. Ajax has adopted early the provisions of ASC 842 on January 1, 2017. What's the initial value...
1. Schenn's Tools and Dies Corporation buys a stamping machine for $480,000. The machine has an...
1. Schenn's Tools and Dies Corporation buys a stamping machine for $480,000. The machine has an estimated residual value of $40,000. Shenn's Tools and Dies Corp expects the machine to produce four million units. It makes 560,000 units during 2018. Using the units-of-production method, Shenn's Tools and Dies Corp would report depreciation expense for 2018 of: Multiple Choice $560,000. $67,200. $61,600. $520,000. 2. Utley Corp purchased a new truck on January 1, 2018. The truck cost $25,000, has an estimated...
PROBLEM 3 Depreciation Yara Company purchased a new machine on 1 September 2007, at a cost...
PROBLEM 3 Depreciation Yara Company purchased a new machine on 1 September 2007, at a cost of $180,000. The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $10,000. Yara adopts the cost model as its accounting policy in subsequently measuring its property, plant, and equipment. Instructions Prepare a complete depreciation schedule, beginning with calendar year 2007, under each of the methods listed below (assume that half-year convention is used): Straight-line....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT