what is the answer of 2 and 3 part of this qestion. ? Depreciation Methods Gruma
ID: 2472503 • Letter: W
Question
what is the answer of 2 and 3 part of this qestion. ?
Depreciation Methods
Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates:
In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answer to the nearest dollar.
Required:
Compute the depreciation for 2016 and 2017 under each of the following methods:
Straight-line method
Sum-of-the-years'-digits method
Double-declining-balance method
Activity method based on hours worked
Activity method based on units of output
For each method, what is the book value of the machine at the end of 2016? At the end of 2017?
Straight-line method
Sum-of-the-years'-digits method
Double-declining-balance method
Activity method based on hours worked
Activity method based on units of output
If Gruman used a service life of 8 years or 15,000 hours and a residual value of $10,000, what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods?
Depreciation expense
Straight-line method
Sum-of-the-years'-digits method
Double-declining-balance method
Book value
Straight-line method
Sum-of-the-years'-digits method
Double-declining-balance method
Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000Explanation / Answer
Depreciation for 2016 and 2017:
Book value of the machine:
If service life is 8 years:
Depreciation expense:
Book value of machine:
Year Straight-line method Sum of the years'-digits-method Double-declining balance method Activity method based on hours worked Activity method based on units of output 2016 $ 40,000 $ 66,667 $ 88,000 $ 36,000 $ 44,000 2017 $ 40,000 $ 53,333 $ 52,800 $ 30,000 $ 35,000Related Questions
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