Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates: Service life Production 5 years or 10,000 hours 180,000 units Residual value $ 18,000 In 2019, Gruman uses the machine for 1,700 hours and produces 40,000 units. In 2020, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar. Required: 1. Compute the depreciation for 2019 and 2020 under each of the following methods: a. Straight-line method 2019 $ 36,000 2020 $ 36,000 b. Sum-of-the-years'-digits method 2019 $ 60,000 2020 $ 48,000 c. Double-declining-balance method 2019 $ 79,200 2020 $ 47,520 1. Activity method based on hours worked 2019 $ 2020 $ 30,600 21,600 Activity method based on units of output e. Activity method based on units of output 2019 $ 40,000 2020 $ 30,000 2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020? a. Straight-line method 2019 $ 2020 $ b. Sum-of-the-years'-digits method 2019 $ 2020 $ c. Double-declining-balance method 2019 $ 2020 $ d. Activity method based on hours worked 2019 $ 2020 $ e. Activity method based on units of output 2019 $ 2020 $ 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000, what would be the effect on the following under the straight-line, sum-of-the- years'-digits, and double-declining-balance depreciation methods? Depreciation expense a. Straight-line method 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000, what would be the effect on the following under the straight-line, sum-of-th years'-digits, and double-declining-balance depreciation methods? Depreciation expense a. Straight-line method 2019 $ 23,625 2020 $ 23,625 b. Sum-of-the-years'-digits method 2019 $ 2020 $ 20,250 X 18,375 X c. Double-declining-balance method 2019 $ 49,500 2020 $ 37,125 Book value a. Straight-line method 2019 $ 2020 $ b. Sum-of-the-years'-digits method 2019 $ 2020 $ c. Double-declining-balance method 2019 $ 2020 $ Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates: Service life Production 5 years or 10,000 hours 180,000 units Residual value $ 18,000 In 2019, Gruman uses the machine for 1,700 hours and produces 40,000 units. In 2020, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar. Required: 1. Compute the depreciation for 2019 and 2020 under each of the following methods: a. Straight-line method 2019 $ 36,000 2020 $ 36,000 b. Sum-of-the-years'-digits method 2019 $ 60,000 2020 $ 48,000 c. Double-declining-balance method 2019 $ 79,200 2020 $ 47,520 1. Activity method based on hours worked 2019 $ 2020 $ 30,600 21,600 Activity method based on units of output e. Activity method based on units of output 2019 $ 40,000 2020 $ 30,000 2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020? a. Straight-line method 2019 $ 2020 $ b. Sum-of-the-years'-digits method 2019 $ 2020 $ c. Double-declining-balance method 2019 $ 2020 $ d. Activity method based on hours worked 2019 $ 2020 $ e. Activity method based on units of output 2019 $ 2020 $ 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000, what would be the effect on the following under the straight-line, sum-of-the- years'-digits, and double-declining-balance depreciation methods? Depreciation expense a. Straight-line method 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000, what would be the effect on the following under the straight-line, sum-of-th years'-digits, and double-declining-balance depreciation methods? Depreciation expense a. Straight-line method 2019 $ 23,625 2020 $ 23,625 b. Sum-of-the-years'-digits method 2019 $ 2020 $ 20,250 X 18,375 X c. Double-declining-balance method 2019 $ 49,500 2020 $ 37,125 Book value a. Straight-line method 2019 $ 2020 $ b. Sum-of-the-years'-digits method 2019 $ 2020 $ c. Double-declining-balance method 2019 $ 2020 $
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
What characteristics do you think Jamie Oliver has that have helped make his various enterprises a success?
-
Argyl Manufacturing is evaluating the possibility of expanding its operations. This expansion will require the purchase of land at a cost of $100,000. A new building will cost $100,000 and will be...
-
The file P03_65.xlsx contains basketball data on all NBA teams for five seasons. The SRS (simple rating system) variable is a measure of how good a team is in any given year. a. Given the explanation...
-
Explain why mass transfer correlations for co-flow cannot be used for countercurrent flow.
-
Ever since the day she took her first economics class in high school, Lydia wondered about the financial practices of her parents. They worked very hard to earn enough money to live a comfortable...
-
Sukdeev is looking for a mortgage.He goes to the bank and they tell him that the rate is 4% with quarterly payments.Since he took Managerial Finance he knows that this is the APR.What would be...
-
Jrgen predicts that regular exercise has a positive effect on children's academic performance. He hypothesizes that children who play outside 3 hours a day will have higher grade point averages than...
-
A quality-control engineer wants to check whether (in accordance with specifications) \(95 \%\) of the electronic components shipped by his company are in good working condition. To this end, he...
-
Which conditions for the binomial distribution, if any, fail to hold in the following situations? (a) The number of persons having a cold at a family reunion attended by 30 persons. (b) Among 8...
-
An engineering student correctly answers \(85 \%\) of all questions she attempts. What is the probability that the first incorrect answer was the fourth one?
-
A milk processing unit claims that, of the processed milk converted to powdered milk, \(95 \%\) does not spoil. Find the probabilities that among 15 samples of powdered milk (a) all 15 will not...
-
Prove that \(B(x ; n, p)=1-B(n-x-1 ; n, 1-p)\).
-
MCQ 1.1. Tim Hortons in the UAE has realized that there are several ways to minimize the impact of process variation on the quality of service delivery. Which one of the following is considered as...
-
U.S. households have become smaller over the years. The following table from the 2010 GSS contains information on the number of people currently aged 18 years or older living in a respondent's...
-
What is characteristic of a flat structure? A. Narrow span of control. B. Fewer layers in the reporting structure. C. Combines two structures into one. D. Is cost-effective with the use of resources.
-
Use the working papers from Work Together 18-2. A comparative balance sheet and forms for analyzing changes in long-term assets, long-term liabilities, and stockholders' equity are provided in the...
-
The following business transactions represent selected cash receipts (cash inflows) and cash payments (cash outflows) of Burlingame Tuxedo. A blank form is provided in the Working Papers. Work...
Study smarter with the SolutionInn App