Question: QUESTION 1 Amortization Methods (20 Marks) Micro Circuit Company purchased new equipment on January 1, 2017, at a cost of $80,000. Useful life of this

QUESTION 1 Amortization Methods (20 Marks)

Micro Circuit Company purchased new equipment on January 1, 2017, at a cost of $80,000. Useful life of this equipment was estimated at 4 years, with an estimated residual value of $5,000 and estimated production of 150,000 units. The actual units produced by the equipment would be:

2017 15,000 units

2018 40,000 units

2019 35,000 units

2020 37,500 units

2021 22,500 units

Required:

Compute the annual depreciation expense for each year until this equipment becomes fully depreciated under each of the following methods listed below. Show all supporting computations for full marks.

Straight-line.
Units-of-production method
Double-Declining-Balance.

Indicate what the book value of the equipment would be under each method at the end of 2019.

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!

Question 1- . On, May 1, 2018, S. Products Co. purchased new machinery for $461,000. The machinery has an estimated useful life of eight years and 11,000 salvage value. The company computed the...

Problem# 1: John Dillinger Company purchased new equipment on January 1, 2017, at a cost of $100,000. The equipment is expected to have a useful life of four years with a $10,000 residual value....

Straight-Line and Units-of-Production Methods Assume that Sample Company purchased factory equipment on January 1, 2017, for $30,000. The equipment has an estimated life of five years and an...

Straight-Line and Units-of-Production Methods Assume that Sample Company purchased factory equipment on January 1, 2017, for $35,000. The equipment has an estimated life of five years and an...

Straight-Line and Units-of-Production Methods Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment has an estimated life of five years and an...

This is the continuation of question 1. QUESTION ONE (40 marks) Micro Dryer Company (Ghana) is an unlisted subsidiary of a UK company. The subsidiary was incorporated in Ghana in 2015 with an...

On November 1, 2018, Machine Gun Kelly Company loaned Baby Face Nelson Company $20,000 and received a 6% interest bearing note with both interest and principal due in one year How much interest...

Compute the depreciation for Townsend for the first and second years of use by each of the following methods: straight-line units-of-production (1,200 hours the first year; 2,250 hours the second...

32. A company acquired a machine on July 1, 2016 and paid P5,200,000 including freight of P50,000 and installation of P150,000. The estimated life of the machine is 8 years or a total of P100,000...

Problem# 1 : John Dillinger Company purchased new equipment on January 1, 2016, at a cost of $100,000. The equipment is expected to have a useful life of four years with a $10,000 residual value....

2. [10 marks] The k-means algorithm is widely used in cluster analysis for its simplicity. Since sample means can be severely affected by outliers, one may want to replace sample means with sample...

Suppose a random sample of 100 U.S. companies taken in 2005 showed that 21 offered high-deductible health insurance plans to their workers. A separate random sample of 120 firms taken in 2006 showed...

q , 3 . Which of the following is not an example of a "new entrant" in the financial services industry? ( A ) Digital - only banks ( B ) General insurance products in supermarkets ( C ) Traditional...