A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in the 1st year, 124,600 in the 2nd year, 121,800 in the 3rd year, 8,600 in the 4th year. Units-of-production: Prepare a table with a heading for each method of depreciation and compute depreciation for each year. Year Straight-line Units-of-Production Double-declining-balance 1 2 3 Straight-line depreciation = (Cost- salvage value) / useful life (Hint: Depreciation amount for straight-line will be the same each year). Calculate: 4 Total Step 1: Compute depreciation per unit = (Cost-salvage value) / total units of production Calculate: Step 2: Depreciation expense = Depreciation per unit x units produced in period Depreciation Year Units per unit Depreciation 2 3 4 Double-declining balance: Step 1: Straight-line rate = 100% / useful life Calculate: Step 2: Multiply the straight-line rate x 2 Calculate: Step 3: Multiply DDB rate x beginning-period book value (Reminder1: Book value is always original cost - accumulated depreciation) (Reminder2: Book value cannot go below salvage value-adjust 4th year depreciation) (Reminder3: You may round depreciation amounts to whole dollars) Accumulated Beginning Book value. Voor Data Depreciation Depreciation Bookinlue 1 + A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in the 1st year, 124,600 in the 2nd year, 121,800 in the 3rd year, 8,600 in the 4th year. Units-of-production: Prepare a table with a heading for each method of depreciation and compute depreciation for each year. Year Straight-line Units-of-Production Double-declining-balance 1 2 3 Straight-line depreciation = (Cost- salvage value) / useful life (Hint: Depreciation amount for straight-line will be the same each year). Calculate: 4 Total Step 1: Compute depreciation per unit = (Cost-salvage value) / total units of production Calculate: Step 2: Depreciation expense = Depreciation per unit x units produced in period Depreciation Year Units per unit Depreciation 2 3 4 Double-declining balance: Step 1: Straight-line rate = 100% / useful life Calculate: Step 2: Multiply the straight-line rate x 2 Calculate: Step 3: Multiply DDB rate x beginning-period book value (Reminder1: Book value is always original cost - accumulated depreciation) (Reminder2: Book value cannot go below salvage value-adjust 4th year depreciation) (Reminder3: You may round depreciation amounts to whole dollars) Accumulated Beginning Book value. Voor Data Depreciation Depreciation Bookinlue 1 +
Expert Answer:
Answer rating: 100% (QA)
A STRAIGHT LINE DEPRECIATION STRAIGHT LINE DEP ORIGINAL COSTSALVAGE VALUEUSEFUL LIFE 2575002... View the full answer
Related Book For
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
Posted Date:
Students also viewed these accounting questions
-
A machine costing $216,000 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce...
-
On January 1 the West Company had outstanding 10,000 shares of $10 par common stock , which had been originally issued at an average price of $35 per share. During the year the company engaged in the...
-
A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Companys factory on January 1. The factory manager estimates the machine will produce...
-
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in...
-
It is the end of 2010 and you are an accountant for the Stone Company. During 2010, sales of the companys products slumped and the companys earnings are expected to be much less than those of 2009....
-
Problem refer to the function g shown in the figure. Use the graph to estimate the indicated function values and limits (E) is g continuous at x = 4? Explain g(x) Figure for 15-22 (A) lim g(x) (C)...
-
Part 1: Calculating Short-Term Measurements The following annual information is available for Lakewood Industries, an investment center: a. Calculate ROI (return on investment). Base your...
-
A widget manufacturer currently produces 200,000 units a year. It buys widget lids from an outside supplier at a price of $2 a lid. The plant manager believes that it would be cheaper to make these...
-
The income statement, balance sheets, and additional information for Video Phones, Incorporated, are provided. Net sales Expenses: VIDEO PHONES, INCORPORATED Income Statement For the Year Ended...
-
The East Division of Kensic Company manufactures a vital component that is used in one of Kensics major product lines. The East Division has been experiencing some difficulty in coordinating...
-
component reliability for the redesigned product? 16. A Quality Manager at an Auto Body Shop visually inspects 25 re-sprayed vehicles each week for "aesthetics. The Quality Manager will reject any...
-
What are some very interesting discussion questions about strategic alliances or merger?
-
Cutter Enterprises purchased equipment for $66,000 on January 1, 2024. The equipment is expected to have a five-year life and a residual value of $5,700. Using the double-declining-balance method,...
-
Q2 Outline one 3 (1) nursing intervention that would assist with Maida's Physical comfort preoperatively. S NEW S
-
In a like-kind exchange, Joe exchanged business-use real property (FMV $200,000, basis $150,000) for a smaller piece of business-use real property (FMV $140,000) plus shares of stock (FMV $60,000)....
-
Book: An Intro to Combustion 4th ed. by Turns and HaworthPlease solve #14 Problem 9. Write down the 1-step global reaction for propane-air combustion at stoichiometric conditions. The reaction rate...
-
Question 3 (1 point) The statements float b = 8/5; System.out.println(b): display 1.6 1.0 An error occurs because the double value 1.6 cannot be stored in a float variable
-
What is the amount of total interest dollars earned on a $5,000 deposit earning 6% for 20 years?
-
Listed below are costs of providing an airline service. Classify each cost as (a) either variable or fixed, and (b) either direct or indirect. Consider the cost object to be a flight. Variable or...
-
Beech Company produced and sold 105,000 units of its product in May. For the level of production achieved in May, the budgeted amounts were: sales, $1,300,000; variable costs, $750,000; and fixed...
-
Forrest Company manufactures phone chargers and has a JIT policy that ending inventory must equal 10% of the next months sales. It estimates that Octobers actual ending inventory will consist of...
-
Debra Company reports the following financial information for the year: Accounts receivable: Based on prior experience the management of Debra Company expects two percent of credit sales to be...
-
1. In an effort to increase collections, Bishop Company offers a 1/10, n/30 discount for early payment. Assume a sale of \($150,000\) made on August Ist. Determine the total sales, the sales...
-
Consider the following balance sheet data for Davis Co., Inc., an electronics and major appliance retailer, at February 26, 2019 and February 27, 2018 (amounts in thousands): a. Prepare a comparative...
Study smarter with the SolutionInn App