PlasticWorks Corporation bought a machine at the beginning of the year at a cost of $12,700....
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PlasticWorks Corporation bought a machine at the beginning of the year at a cost of $12,700. The estimated useful life was five years, and the residual value was $2,100. Assume that the estimated productive life of the machine is 10,600 units. Expected annual production was: year 1, 3,200 units; year 2, 3,200 units; year 3, 2,100 units; year 4, 1,060 units; and year 5, 1,040 units. Required: 1. Complete a depreciation schedule for each of the alternative methods. (Enter all values as positive amount.) a. Straight-line. Year At acquisition 1 2 3 4 5 Income Statement Depreciation Expense b. Units-of-production. Year At acquisition 1 2 3 4 5 Income Statement Depreciation Expense Cost Cost Balance Sheet Accumulated Depreciation Balance Sheet Accumulated Depreciation Book Value Book Value c. Double-declining-balance. Year At acquisition 1 2 3 4 Income Statement Depreciation Expense Cost No Yes Straight-line O Units-of-production O Double-declining-balance Balance Sheet Accumulated Depreciation 2-a. Which method will result in the highest net income in year 2? Book Value 2-b. Does this higher net Income mean the machine was used more efficiently under this depreciation method? PlasticWorks Corporation bought a machine at the beginning of the year at a cost of $12,700. The estimated useful life was five years, and the residual value was $2,100. Assume that the estimated productive life of the machine is 10,600 units. Expected annual production was: year 1, 3,200 units; year 2, 3,200 units; year 3, 2,100 units; year 4, 1,060 units; and year 5, 1,040 units. Required: 1. Complete a depreciation schedule for each of the alternative methods. (Enter all values as positive amount.) a. Straight-line. Year At acquisition 1 2 3 4 5 Income Statement Depreciation Expense b. Units-of-production. Year At acquisition 1 2 3 4 5 Income Statement Depreciation Expense Cost Cost Balance Sheet Accumulated Depreciation Balance Sheet Accumulated Depreciation Book Value Book Value c. Double-declining-balance. Year At acquisition 1 2 3 4 Income Statement Depreciation Expense Cost No Yes Straight-line O Units-of-production O Double-declining-balance Balance Sheet Accumulated Depreciation 2-a. Which method will result in the highest net income in year 2? Book Value 2-b. Does this higher net Income mean the machine was used more efficiently under this depreciation method?
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Answer rating: 100% (QA)
a Straightline method Year Depreciation Expense Cost Depreciation Book Value 0 12700 12700 1 2080 20... View the full answer
Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
Posted Date:
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