Rufiel Corporation purchased a new machine on JULY 1, 2020. The machine cost $160,000 and had an
Question:
Rufiel Corporation purchased a new machine on JULY 1, 2020. The machine cost $160,000 and had an estimated salvage value of $4,000. (NOTE THE PURCHASE DATE IS JULY 1, 2020)--Hint: Only 1/2 year depreciation in 2020.
Inverness estimated that the machine will have a useful life of 6 years or 100,000 units.
Inverness uses the machine in its manufacturing operations and produces 20,000 units in Year 1, 33,000 units in Year 2 and 19,000 units in Year 3, 17,000 units in Year 4 and 6,000 units in Year 5 and 5,000 units in Year 6.
Required:
a) Compute depreciation expense for Years 1 through 3 using the following methods:
a) Sstraight line
b) Units-of-production
c) Double declining balance
Indicate what is the balance of Accumulated Depreciation and book value at the end of each year using the Straight Line method ONLY.
College Accounting Chapters 1-30
ISBN: 978-1259631115
15th edition
Authors: John Price, M. David Haddock, Michael Farina