Question

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 a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

1.		Straight-line Method		$
2.		Activity Method
		Year
		2018		$
		2019		$
		2020		$
		2021		$
		2022		$
3.		Sum-of-the-Years'-Digits Method
		Year
		2018		$
		2019		$
		2020		$
		2021		$
		2022		$
4.		Double-Declining-Balance Method
		Year
		2018		$
		2019		$
		2020		$
		2021		$
		2022		$

eTextbook and Media

  

  

Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)

Year		Straight-line Method		Sum-of-the-years'-digits method		Double-declining-balance method
2018		$		$		$
2019
2020
2021
2022
2023

Answer 1

CALCULATION OF THE DEPRECIATION AS PER STRAIGHT LINE METHOD
Purchase Cost of Equipment =	$                       105,000
Less: Salvage Value	$                            8,100
Net Value for Depreciation (A)	$                         96,900
Useful life of the Assets (B)	5	Years
Depreciation per year = Value for Depreciation (A/B)	$                         19,380
Year	Assets Cost		Depreciation Expenses		Accumulated Depreciation		Book Value
Purchase	105,000						$             105,000
Year 2018			$              19,380		$           19,380		$               85,620
Year 2019			$              19,380		$           38,760		$               66,240
Year 2020			$              19,380		$           58,140		$               46,860
Year 2021			$              19,380		$           77,520		$               27,480
Year 2022			$              19,380		$           96,900		$                  8,100
CALCULATION OF THE DEPRECIATION AS PER UOP METHOD
Purchase Cost of Equipment =	$                       105,000
Less: Salvage Value =	$                            8,100
Net Value for Depreciation (A)	$                         96,900
Expected to Produce in Units (B)	114,000	Hrs
Depreciation per Units = (A/B)	$                              0.85	Per Hours
Year	Units		Depreciable Units	X	Rate Per Unit	=	Depreciation Expenses	Accumulated Depreciation	Book Value
Year 2018	22,800		22,800	X	$                0.85	=	$               19,380	$             19,380	$           85,620
Year 2019	28,500		28,500	X	$                0.85	=	$               24,225	$             43,605	$           61,395
Year 2020	17,100		17,100	X	$                0.85	=	$               14,535	$             58,140	$           46,860
Year 2021	34,200		34,200	X	$                0.85	=	$               29,070	$             87,210	$           17,790
Year 2022	11,400		11,400	X	$                0.85	=	$                  9,690	$             96,900	$             8,100
CALCULATION OF THE DEPRECIATION AS PER DOUBLE DECLINE METHOD
Purchase Cost of Equipment =	$                       105,000
Rate of Depreciation =
Rate of Depreciation = (1 / 5 Years )	0.20 or 20%
(Depreciation / Purchase price )
Double decline deprecation rate = 20.00% * 2 =	40.0%
Year	Assets Cost		Beginning Book Value	X	Rate of Depreciation	=	Depreciation Expenses	Accumulated Depreciation	Book Value
Purchase	105,000								$        105,000
Year 2018			$            105,000	X	40.00%	=	$               42,000	$             42,000	$           63,000
Year 2019			$              63,000	X	40.00%	=	$               25,200	$             67,200	$           37,800
Year 2020			$              37,800	X	40.00%	=	$               15,120	$             82,320	$           22,680
Year 2021			$              22,680	X	40.00%	=	$                  9,072	$             91,392	$           13,608
Year 2022			$              13,608 0 0 Add a comment Know the answer? Your Answer: Post as a guest Your Name: What's your source? Earn Coins Coins can be redeemed for fabulous gifts. Log In Sign Up Post as anonymous Post Your Answer Not the answer you're looking for? Ask your own homework help question Similar Questions On January 1, 2015, a machine was purchased for $90,900. The machine has an estimated salvage... On January 1, 2015, a machine was purchased for $90,900. The machine has an estimated salvage value of $6,060 and an estimated useful life of 5 years. The company closed its books on December 31. Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying the following methods. (Round answers to 0 decimal places, e.g. 45,892.) Year Sum-of-the-years'-digits method 2015 - Answer is $ 21210 2016 2017 2018 2019 2020 On January 1, 2017, a machine was purchased for $90,000. The machine has an estimated residual... 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. ((((((((((((((Instructions)))))))))))))))) A) Compute the annual depreciation charges over the machine’s... A machine cost $800,000 on April 1, 2020. Its estimated salvage value is $80,000 and its... A machine cost $800,000 on April 1, 2020. Its estimated salvage value is $80,000 and its expected life is 4 years. Calculate the depreciation expense by straight-line for 2020. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by double-declining balance for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by sum-of-the-years'-digits for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Which... Stellar Corporation purchased a new machine for its assembly process on August 1, 2017. The cost... Stellar Corporation purchased a new machine for its assembly process on August 1, 2017. The cost of this machine was $124,974. The company estimated that the machine would have a salvage value of $13,674 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 23,000 hours. Year-end is December 31. Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate... The cost of equipment purchased by Sheffield, Inc., on June 1, 2020, is $100,800. It is... The cost of equipment purchased by Sheffield, Inc., on June 1, 2020, is $100,800. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 46,200, and its total production is estimated at 660,000 units. During 2020, the machine was operated 7,080 hours and produced 64,900 units. During 2021, the machine was operated 6,490 hours and produced... On October 1, 2018, the Allegheny Corporation purchased machinery for $123,000. The estimated service life of... On October 1, 2018, the Allegheny Corporation purchased machinery for $123,000. The estimated service life of the machinery is 10 years and the estimated residual value is $2,000. The machine is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2018 and 2019 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 1. Straight line. 2. Sum-of-the-years’-digits. 3. Double-declining balance. 4. One hundred fifty percent... On October 1, 2018, the Allegheny Corporation purchased machinery for $299,000. The estimated service life of... On October 1, 2018, the Allegheny Corporation purchased machinery for $299,000. The estimated service life of the machinery is 10 years and the estimated residual value is $2,000. The machine is expected to produce 540,000 units during its life. Required: Calculate depreciation for 2018 and 2019 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 1. Straight line. 2. Sum-of-the-years’-digits. 3. Double-declining balance. 4. One hundred fifty percent... On January 1, 2018, Canseco Plumbing Fixtures purchased equipment for $36,000. Residual value at the end... 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... 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... 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... ADVERTISEMENT Need Online Homework Help? Get Answers For Free Most questions answered within 1 hours. Ask a Question ADVERTISEMENT Active Questions Assume that the price and the demand are both positive. Use the price-demand equation, x= f(p)=  √(1600-2p^2)... asked 28 minutes ago aBankruptcy: Moral, Amoral, or Immoral? Is it unethical to avoid paying one’s debts by going into... asked 34 minutes ago Pick a specific leader facing an issue in the last six months that you can analyze... asked 34 minutes ago For the past several years, Joanna and her two sisters have taken turns claiming a dependency... asked 1 hour ago Assume that you developed an e-commerce site for the purpose of doing business. As a continuation... asked 1 hour ago To keep her dog from running away while she talks to a friend, Susan pulls gently... asked 1 hour ago Problem 2. (Chapter 11: The Storage and Handling System) Under what general circumstances is private warehousing... asked 1 hour ago Outline the types of costs that would be included in the total cost of ownership of... asked 1 hour ago Post a brief description of an example of long-term memory loss that you have experienced. Then... asked 1 hour ago A driver is traveling 120 km/h on a road with a negative 1% grade. There is... asked 1 hour ago Which recommendation can you address at Holland America line about sustainability? asked 1 hour ago What is the rate of return for Apple from their form 10-K. What numbers would you... asked 1 hour ago About Contact Terms of Use Privacy Policy Academic Honesty Policy Homework Answer Scanner App Report DMCA © 2022 JustAAA   user contributions licensed under cc by-sa 4.0