A machine costing $257,500 with a four-year life and an estimated $20,000 salvag

Question

A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,600 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)

Required:

Complete this question by entering your answers in the tabs below. Units of Straight Line Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Straight-line depreciation. Straight-Line Depreciation Year Depreciation Expense 4 Total

Explanation / Answer

Straight line dep :

b) Unit of production dep :

Dep per unit = (257500-20000)/475000 = 0.50 per unit

3) Double decline balance metod :

Year Depreciation expense 1 (257500-20000/4) = 59375 2 59375 3 59375 4 59375 Total 237500

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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