Question

1. Depreciation Expense. The Sprague Company purchased a fabricating machine on April 1, 2018 at a net cost of $160,000. At the end of its 5-year useful life the company expects it will be worth $10,000. Sprague also estimates that the machine will run for 30,000 hours over its 5-year life. Compute depreciation for 2018 and 2019 using each of the following methods:

a. Straight-line

b. Sum-of-the-years’ digits

c. Double declining balance

d. Units of Production (the machine operated for 5,000 hours in 2018 and 6,000 hours in 2019)

Answer #1

On January 1, 2017, a machine was purchased for $90,000. The
machine has an estimated residual value of $6,000 and an estimated
useful life of 5 years. The machine can operate for 100,000 hours
before it needs to be replaced. The company closed its books on
December 31 and operates the machine as follow; 2017, 20,000 hours;
2018, 25,000 hours; 2019, 15,000 hours; 2020, 30,000 hours; and
2021, 10,000 hours.
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A) Compute the annual depreciation charges over the machine’s...

On January 1, 2018, a machine was purchased for $105,000. The
machine has an estimated salvage value of $8,100 and an estimated
useful life of 5 years. The machine can operate for 114,000 hours
before it needs to be replaced. The company closed its books on
December 31 and operates the machine as follows: 2018, 22,800 hrs;
2019, 28,500 hrs; 2020, 17,100 hrs; 2021, 34,200 hrs; and 2022,
11,400 hrs.
Compute the annual depreciation charges over the machine’s life
assuming...

On January 1, 2018, Canseco Plumbing Fixtures purchased
equipment for $36,000. Residual value at the end of an estimated
four-year service life is expected to be $6,000. The company
expects the machine to operate for 20,000 hours. The machine
operated for 2,500 and 3,300 hours in 2018 and 2019,
respectively.
a. Calculate depreciation expense for 2018 and
2019 using straight line method.
b. Calculate depreciation expense for 2018 and
2019 using sum-of-the-years'-digits method.
c. Calculate depreciation expense for 2018 and...

On January 1, 2018, Canseco Plumbing Fixtures purchased
equipment for $56,000. Residual value at the end of an estimated
four-year service life is expected to be $2,000. The company
expects the machine to operate for 15,000 hours. The machine
operated for 3,500 and 4,300 hours in 2018 and 2019,
respectively.
a. Calculate depreciation expense for 2018 and
2019 using straight line method.
b. Calculate depreciation expense for 2018 and
2019 using sum-of-the-years'-digits method.
c. Calculate depreciation expense for 2018 and...

On January 1, 2018, Canseco Plumbing Fixtures purchased
equipment for $64,000. Residual value at the end of an estimated
four-year service life is expected to be $10,000. The company
expects the machine to operate for 10,000 hours. The machine
operated for 3,900 and 4,700 hours in 2018 and 2019, respectively.
Calculate depreciation expense for 2018 and 2019 using straight
line method. Calculate depreciation expense for 2018 and 2019 using
sum-of-the-years'-digits method. Calculate depreciation expense for
2018 and 2019 using double-declining...

Depreciation for Partial Periods
The company purchased a machine on April 1 for $100,000. The
machine has an estimated useful life of five years and an estimated
salvage value of $15,000. The company computes partial-year
depreciation to the nearest whole month.
Compute the amount of depreciation expense for this year and
next year using sum-of-the-years'-digits depreciation. Round your
answers to the nearest whole dollar.
Depreciation expense this year
$
Depreciation expense next year
$
Compute the amount of depreciation expense...

Depreciation Methods 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 200,000 units
Residual value $20,000 In 2016, Gruman uses the machine for 1,800
hours and produces 44,000 units. In 2017, Gruman uses the machine
for 1,500 hours and produces 35,000 units. If required, round your
final answer to the nearest dollar. Required: Compute the
depreciation for 2016 and 2017 under each of the following...

Exercise 11-1 Depreciation methods [LO11-2]
On January 1, 2018, the Excel Delivery Company purchased a
delivery van for $129,000. At the end of its five-year service
life, it is estimated that the van will be worth $13,200. During
the five-year period, the company expects to drive the van 386,000
miles.
Required:
Calculate annual depreciation for the five-year life of the van
using each of the following methods.
1. Straight line.
2. Sum-of-the-years’-digits.
3. Double-declining balance.
4. Units of production using...

A company with a fiscal year end at December 31, purchased a
machine, with a cost $1,900,000 on April 1, 2017 using cash
reserves in the corporate checking account. Management estimated
the residual value will be $390,000 and that the estimated expected
useful life is ten years.
Calculate the depreciation expense
(to the nearest dollar) for 2017 and 2018 by each of the following
methods, showing your work in detail.
A. Straight-line
B. Double-declining balance
C. Sum-of-the-years'-digits
Using the attached...

Mike's Company purchased equipment that cost $118,000 on August
1, 2018. The equipment has an estimated useful life of eight years
with an estimated salvage of $10,000. Mike's Company has a December
31 year-end. Calculate the following, showing all of your
computations well-labeled and in good form under each of the
followingindependent scenarios:
1. The equipment is depreciated using machine hours. The machine
is expected to be used for a total of 110,000 hours over it
estimated useful life. The...

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