Grove Co. acquired a production machine on January 1, 2016, at a cost of $480,000. The machine

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Grove Co. acquired a production machine on January 1, 2016, at a cost of $480,000. The machine is expected to have a four-year useful life, with a salvage value of $80,000. The machine is capable of producing 50,000 units of product in its lifetime. Actual production was as follows: 11.000 units in 2016: 16.000 units in 2017; 14.000 units in 2018: and 9.000 units in 2019.

Following is the comparative balance sheet presentation of the net hook value of the production machine at December 31 for each year of the asset's life, using three alternative depreciation methods (items a-c):

Grove Co. acquired a production machine on January 1, 2016,

Required:
Identify the depreciation method used for each of the preceding comparative balance sheet presentations (items a-c). If a declining-balance method is used, be sure to indicate the percentage (150% or 200%). (Read the balance sheet from right to left to determine how much has been depreciated each year. Remember that December 31, 2016, is the end of the first year.)

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Accounting What the Numbers Mean

ISBN: 978-1259535314

11th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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