Check my work Purchase price Delivery cost Installation charge Estimated life Estimated units Salvage estimate $ 55,800 $ 4,000 $ 2,000 5 years 142,000 $ 5,000 During Year 1, the machine produced 38,000 units, and during Year 2 it produced 40,000 units. Required: a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. Note: Round your answers to the nearest dollar amount. MACRS table: Year 5-Year property,% 7-Year property,% 1 20.00 14.29 2 32.00 24.49 3 19.20 17.49 4 11.52 12.49 5 11.52 8.93 6 5.76 8.92 7 8.93 8 4.46
Check my work Purchase price Delivery cost Installation charge Estimated life Estimated units Salvage estimate $ 55,800 $ 4,000 $ 2,000 5 years 142,000 $ 5,000 During Year 1, the machine produced 38,000 units, and during Year 2 it produced 40,000 units. Required: a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. Note: Round your answers to the nearest dollar amount. MACRS table: Year 5-Year property,% 7-Year property,% 1 20.00 14.29 2 32.00 24.49 3 19.20 17.49 4 11.52 12.49 5 11.52 8.93 6 5.76 8.92 7 8.93 8 4.46
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
ChapterA: Methods Of Depreciation
Section: Chapter Questions
Problem 2P: Use the information in Problem A-1 to solve this problem. Assume the delivery van is expected to...
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Step 1: Define depreciation expense
VIEWStep 2: Capitalized cost of the machine
VIEWStep 3: Answer a. - Depreciation expense using the straight-line method
VIEWStep 4: Answer b. - Depreciation expense using the double-declining-balance method
VIEWStep 5: Answer c. - Depreciation expense using the units of production method
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