A company purchased machinery for $200,000 on 1st January. It has an estimated useful life of...

 

Transcribed Image Text:

A company purchased machinery for $200,000 on 1st January. It has an estimated useful life of 10 years and an estimated salvage value of $20,000. The firm sells the asset at the salvage value at the end of the 10th year. The machine has an expected production of 15000 units during its useful life. Now the production pattern is as follows: Year Production 1-3 2000 units per year 4-7 1500 units per year 8-10 1000 units per year Answer the following questions using the Units of Production Method. a. What is the BV at year-3? b. What is the BV at year-10? What is the cumulative depreciation through year-8? A company purchased machinery for $200,000 on 1st January. It has an estimated useful life of 10 years and an estimated salvage value of $20,000. The firm sells the asset at the salvage value at the end of the 10th year. The machine has an expected production of 15000 units during its useful life. Now the production pattern is as follows: Year Production 1-3 2000 units per year 4-7 1500 units per year 8-10 1000 units per year Answer the following questions using the Units of Production Method. a. What is the BV at year-3? b. What is the BV at year-10? What is the cumulative depreciation through year-8?

Answer rating: 100% (QA)

Purchased Value 200000 Salvage Value 20000 Expected Production 15000 ... View the full answer