A company purchases a machine that has an original cost of $11,500, transportati

Question

A company purchases a machine that has an original cost of $11,500, transportation costs of $500, installation charges of $1,500, an estimated life of 4 years or 20,484 hours, and a residual value of $800. You are depreciating the machine for book purposes. If the machine is acquired on August 1 and is used 2,500 hours during the year, depreciation for the year under the units of production method is . . . $3,375 $3,175 $1,550 $625 Over the first 4 years, the machine is used for 18,000 hours. In Year 5, the machine is used for 3,000 hours. Under the units-of-production method, Year-5 depreciation is . . . $0 $1,540 $1,860 $2,484

Explanation / Answer

Cost Of Machine Ans 1 Original Cost 11,500.00 Transporattion cost        500.00 Installation Charges     1,500.00 13,500.00 Less Residual Value       -800.00 Net Depreciable Amount 12,700.00 Estimated Life in Hours 20,484.00 Depreciation rate per Hour             0.62 No of Hours used during the year of acquisition     2,500.00 Amount of Depreciation     1,549.99 Ans 2 No of Hours till 4 th year end 18,000.00 Total Depreciation till 4th year end 11,159.93 Total Depreciable amount 12,700.00 Depreciation in year 5     1,540.07

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.