Question: I am needing help with this one problem with Depreciation. Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following

I am needing help with this one problem with Depreciation.

Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates:

Service life	5 years or 10,000 hours
Production	180,000 units
Residual value	$ 18,000

In 2016, Gruman uses the machine for 2,000 hours and produces 50,000 units. In 2017, Gruman uses the machine for 1,200 hours and produces 32,000 units. If required, round your final answers to the nearest dollar.

Compute the depreciation for 2016 and 2017 under each of the following methods:

Activity method based on hours worked

20216

2017

Activity method based on units of output

2016

2017

For each method, what is the book value of the machine at the end of 2016? At the end of 2017?

Activity method based on hours worked

2016

2017

Activity method based on units of output

2016

2017

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

How much value do you believe would be created if Magna successfully unwinds its dual-class structure? How would you propose to divide this value between Magna's Class A and B shareholders, i.e., how...

I am needing help with this one problem with Depreciation. Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours...

Gruman Company purchased a machine for $ 1 9 8 , 0 0 0 o n January 2 , 2 0 1 9 . I t made the following estimates: Service life , 5 years o r 1 0 , 0 0 0 hours Production 1 8 0 , 0 0 0 units Residual...

Needing help with this question regarding depreciation Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours...

The Seoul Company purchased an office equipment with a useful life of 10 years on 1 January 2019 for P6.500,000 7 . Cuyapo Company purchased a machine in January At its year end of 31 December 2019,...

The Seoul Company purchased an office equipment with a useful life of 10 years on 1 January 2019 for P6.500.000. 7. Cuyapo Company purchased a machine in January At its year end of 31 December 2019,...

1. MC.11-02 2. RE.11-12 3. RE.11-12.Algo 4. Ex. 11-01 5. Ex. 11-01.Algo 6. Ex. 11-13 7. Ex.11-13.Algo 8. Ex. 11-20 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of...

Gruman Company purchased a machine for $ 1 9 8 , 0 0 0 on January 2 , 2 0 1 6 . It made the following estimates: Service life 5 years or 1 0 , 0 0 0 hours Production 1 8 0 , 0 0 0 units Residual...

The following Treasury bill quotation is posted on the Wall Street Journal. a) If a 90-day T-bill has a face value of $10,000, how much does an investor pay to purchase the bill? b) What is...

You will create a program, cipher.c, which will encode a message by shifting each letter some number of places. Thus, if the shift is 2, then A becomes C, B becomes D, and so on. Like this:...

Under the vacation home rules what expenses qualify to be deducted first?

Mayer sold a depreciable asset for cash of $300,000. The original cost of the asset was $1,200,000. Mayer recognized a gain of $45,000 on the sale. What was the amount of accumulated depreciation on...