2. On January 1, 2012, The XYZ purchased a new bottling system. The system has an...
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2. On January 1, 2012, The XYZ purchased a new bottling system. The system has an expected life of 5 years. The system cost R.0 325,000. Shipping, installation, and set up was an additional R.O 35,000. At the end of the useful life, Ahmed, chief accountant for XYZ, expects to dispose of the bottling system for R.O 96,000. He further anticipates total output of 660,000 bottles over the useful life. (a) Assuming use of the straight-line depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. (b) Assuming use of the units-of-output depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. Actual output, in bottles, was 100,000 (2012), 130,000 (2013), 150,000 (2014), 160,000 (2015), and 120,000 (2016). (c) Assuming use of the double-declining balance depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. (d) Assuming use of the straight-line method, prepare revised depreciation calculations if the useful life estimate was revised at the beginning of 2014, to anticipate a remaining useful life of 4 additional years (in other words, a total life of 6 years). The revised useful life was accompanied by a change in estimated salvage value to R.O 54,400. 2. On January 1, 2012, The XYZ purchased a new bottling system. The system has an expected life of 5 years. The system cost R.0 325,000. Shipping, installation, and set up was an additional R.O 35,000. At the end of the useful life, Ahmed, chief accountant for XYZ, expects to dispose of the bottling system for R.O 96,000. He further anticipates total output of 660,000 bottles over the useful life. (a) Assuming use of the straight-line depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. (b) Assuming use of the units-of-output depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. Actual output, in bottles, was 100,000 (2012), 130,000 (2013), 150,000 (2014), 160,000 (2015), and 120,000 (2016). (c) Assuming use of the double-declining balance depreciation method, prepare a schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year. (d) Assuming use of the straight-line method, prepare revised depreciation calculations if the useful life estimate was revised at the beginning of 2014, to anticipate a remaining useful life of 4 additional years (in other words, a total life of 6 years). The revised useful life was accompanied by a change in estimated salvage value to R.O 54,400.
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System Cost 325000 AddShipping and Installation cost 35000 Cost of Asset 360000 Straight LineDepreci... View the full answer
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1111534912
8th edition
Authors: Gary A. Porter, Curtis L. Norton
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