Please show calculations CALCULATORI I MESSAGE NIY?NSTRUCTOR, STANDARD VIEw|| PR
ID: 2412406 • Letter: P
Question
Please show calculations CALCULATORI I MESSAGE NIY?NSTRUCTOR, STANDARD VIEw|| PRINTER VERSION ?BACK NEXT Exercise 11-6 Oriole Company purchased equipment for $258,915 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years anda salvage value of $14,760. Estimated production is 39,700 units and estimated working hours are 19,900. During 2017, Oriole uses the equipment for 530 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Oriole is on a calendar-year basis ending December 31. (Round rate per hour and rate per unit to 2 decimal places, e.g. 5.35 and final answers to O decimal places, e.g. 45,892.) (a) Straight-line method for 2017 (b) Activity method (units of output) for 2017 (c) Activity method (working hours) for 2017 (d) Sum-of-the-years'-digits method for 2019 (e) Double-declining-balance method for 2018 show work is REQUIRED for this question: ??enshow.work
Explanation / Answer
CALCULATION OF THE DEPRECIATION AS PER STRAIGHT LINE METHOD Purchase Cost of Machine $ 2,58,915.00 Less: Salvage Value $ 14,760.00 Net Value for Depreciation $ 2,44,155.00 Usefule life of the Assets 8 years Depreciation per year = Value for Depreciation / 8 years = 30,519 Total Depreciation for the per year 2017 30,519 CALCULATION OF THE DEPRECIATION AS PER UNITS OF UNITS OF OUTPUT FOR THE YEAR 2017 Purchase Cost of Machine $ 2,58,915.00 Less: Salvage Value $ 14,760.00 Net Value for Depreciation $ 2,44,155.00 Expected to production in Units = 39,700.00 Units Depreciation per Hours = 6.15 Per Units ($ 244,155 / 39,700 Units) Depreciation for Year 2017 = (1000 units * $ 6.15) $ 6,150.00 CALCULATION OF THE DEPRECIATION AS PER UNITS OF UNITS OF WORKING HOURS Purchase Cost of Machine $ 2,58,915.00 Less: Salvage Value $ 14,760.00 Net Value for Depreciation $ 2,44,155.00 Expected to production in hours = 19,900.00 Hours Depreciation per Hours = 12.27 Per Hours ($ 244,155 / 19,900 Hours) Depreciation for Year 2017 = (530 Hours * $ 12.27) $ 6,503 CALCULATION OF THE DEPRECIATION AS PER SUM OF DIGITS METHOD Purchase Cost of Machine $ 2,58,915.00 Less: Salvage Value $ 14,760.00 Net Value for Depreciation $ 2,44,155.00 SUM OF DIGITS = 1+2+3+4+5+6+7+8 =36 Depreciation for the year 2017 For balance of 3 months as first year So depreciation for the year 2017 = ($ 2,44,155 * 8 )/36 *1/4 13,564 Depreciation for the year 2018 So depreciation for the year 2018 for 9 months = ($ 2,44,155 * 8 )/36 *3/4 40,693 So depreciation for the year 2018 for 3 months = ($ 2,44,155 * 7 )/36 *1/4 11,869 Total 52,561 Depreciation for the year 2019 So depreciation for the year 2018 for 3 months = ($ 2,44,155 * 7 )/36 *3/4 35,606 So depreciation for the year 2018 for 3 months = ($ 2,44,155 * 6 )/36 *1/4 10,173 45,779 CALCULATION OF THE DEPRECIATION AS PER DOUBLE DECLINE METHOD FOR MACHINE C Purchase Cost of Machine $ 2,58,915.00 Useful Life = 8 years Depreciation per year = $ 32,364.38 (Purchase price / Useful life) Rate of Depreciation = Rate of Depreciation = (1 / 8 Years ) 0.125 or 12.5% (Depreication / Purchase price ) Double decline deprection rate = 12.50% * 2 = 25.00% Depreciation for the year 2017 = Purchase Value = 2,58,915.00 Rate of Depreciation = 25% /4 = 16,182 Closing Book Value = 2,42,732.81 Opening Balance for the year 2018 = 2,42,732.81 Depreciation for the year 2018 = 60,683
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