Question 4 (15 points) On January 2, 2016, Alpha Company acquired a new machine
ID: 2393953 • Letter: Q
Question
Question 4 (15 points) On January 2, 2016, Alpha Company acquired a new machine by signing a 5 year note for $62,000. The estimated service life is eight years and the total units of output to be 200,000. The estimated residual value is $8,000. Production for the first four years was as follows: Year Units 2016 25,000 2017 30,000 2018 35,000 2019 20,000 Using the units-of-output method, how much is: (Enter only whole dollar values.) 1. the 2019 depreciation expense 2. the accumulate depreciation after the fiscal year 2019 adjusting entry 3. the book value of the truck after the fiscal year 2019 adjusting entry Question 4 options: Save
Explanation / Answer
Answers
A
Cost
$ 62,000.00
B
Residual Value
$ 8,000.00
C=A - B
Depreciable base
$ 54,000.00
D
Usage
200000 units
E
Depreciation per unit
$ 0.27 per unit
Year
Book Value
Usage (units)
Depreciation expense
Ending Book Value
Accumulated Depreciation
[A]
[B]
[C = B x 0.27 per unit]
[D = A – C]
[E = E + C]
2016
$ 62,000.00
25000
$ 6,750.00
$ 55,250.00
$ 6,750.00
2017
$ 55,250.00
30000
$ 8,100.00
$ 47,150.00
$ 14,850.00
2018
$ 47,150.00
35000
$ 9,450.00
$ 37,700.00
$ 24,300.00
2019
$ 37,700.00
20000
$ 5,400.00 [Answer 1]
$ 32,300.00 [Answer 3]
$ 29,700.00 [Answer 2]
2019 Depreciation Expense = $ 5,400
Accumulated Depreciation after year 2019 =$ 29,700
Book Value after 2019 adjustment entry = $ 32,300
A
Cost
$ 62,000.00
B
Residual Value
$ 8,000.00
C=A - B
Depreciable base
$ 54,000.00
D
Usage
200000 units
E
Depreciation per unit
$ 0.27 per unit
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