Identify depreciation methods used Moyle Co. acquired a machine on January 1, 2013, at a cost of
Question:
Identify depreciation methods used Moyle Co. acquired a machine on January 1, 2013, at a cost of $800,000. The machine is expected to have a five-year useful life, with a salvage value of $50,000. The machine is capable of producing 300,000 units of product in its lifetime. Actual production was as follows: 60,000 units in 2013; 40,000 units in 2014; 80,000 units in 2015; 50,000 units in 2016; and 70,000 units in 2017.
Required:
Identify the depreciation method that would result in each of the following annual credit amount patterns to accumulated depreciation. If a declining-balance method is used, indicate the percentage (150% or 200%).
a. Accumulated Depreciation
320,000 ........12/31/13
192,000 ........12/31/14
115,200 ........12/31/15
69,120 ........12/31/16
41,472 ........12/31/17
b. Accumulated Depreciation
150,000 ........12/31/13
100,000 ........12/31/14
200,000 ........12/31/15
125,000 ........12/31/16
175,000 ........12/31/17
c. Accumulated Depreciation
150,000 ........12/31/13
150,000 ........12/31/14
150,000 ........12/31/15
150,000 ........12/31/16
150,000 ........12/31/17
d. Accumulated Depreciation
240,000 ........12/31/13
168,000 ........12/31/14
117,600 ........12/31/15
82,320 ........12/31/16
57,624 ........12/31/17
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...
Step by Step Answer:
Accounting What the Numbers Mean
ISBN: 978-0078025297
10th edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele