With this information above, answer the following questions: 4. During 2017, the
ID: 2536317 • Letter: W
Question
With this information above, answer the following questions:
4. During 2017, the machinery produced 82,000 units. Calculate the following amounts relative to the machinery as they would appear in the 2017 financial statements of Gangnam Style Equestrian Supplies Corp. using the units-of-output method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2017 (1 point)
The carrying value of the machinery at December 31, 2017 (1 point)
Supporting Computation Required:
5. During 2018, the machinery produced 98,000 copies. Calculate the following amounts relative to the machinery as they would appear in the 2018 financial statements of Gangnam Style Equestrian Supplies Corp. using the units-of-output method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2018 (1 point)
The carrying value of the machinery at December 31, 2018 (1 point)
Supporting Computation Required:
6. Calculate the following amounts relative to the computers as they would appear in the 2017 financial statements of Gangnam Style Equestrian Supplies Corp. using the double-declining balance method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2017 (1 point)
The carrying value of the computers at December 31, 2017 (1 point)
Supporting Computation Required:
7. Calculate the following amounts relative to the computers as they would appear in the 2018 financial statements of Gangnam Style Equestrian Supplies Corp. using the double-declining balance method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2018 (1 point)
The carrying value of the computers at December 31, 2018 (1 point)
Supporting Computation Required:
8. Calculate the following amounts relative to the computers as they would appear in the 2019 financial statements of Gangnam Style Equestrian Supplies Corp. using the double-declining balance method of depreciation.
AMOUNT
Depreciation expense for the year ended December 31, 2019 (1 point)
The carrying value of the computers at December 31, 2019 (1 point)
Supporting Computation Required:
AMOUNT
Depreciation expense for the year ended December 31, 2017 (1 point)
The carrying value of the machinery at December 31, 2017 (1 point)
Explanation / Answer
Answers
A
Cost
$ 87,500.00
B
Residual Value
$ 1,500.00
C=A - B
Depreciable base
$ 86,000.00
D
Usage
800000 units
E
Depreciation per unit of copies
$0.1075 [ 86000/800000]
Year
Book Value
Usage
Depreciation expense
Ending Book Value
2017
$ 87,500.00
82000 copies
$ 8,815.00 [82000 x $0.1075]
$ 78,685.00
2018
$ 78,685.00
98000 copies
$ 10,535.00 [98000 x $0.1075]
$ 68,150.00
Depreciation expense for year ended Dec 31, 2017 = $ 8,815
The carrying Value of the machinery at Dec 31, 2017 = $ 78,685
Depreciation expense for year ended Dec 31, 2018 = $ 10,535
The carrying Value of the machinery at Dec 31, 2018 = $ 68,150
A
Cost
$ 36,000.00
B
Residual Value
$ 1,000.00
C=A – B
Depreciable base
$ 35,000.00
D
Life [in years]
3
E=C/D
Annual SLM depreciation
$ 11,666.67 [35000/3]
F=E/C
SLM Rate
33.33….% [11666.67/35000]
G=F x 2
DDB Rate
66.67% [33.33….% x 2]
Year
Beginning Book Value
Depreciation rate
Depreciation expense
Ending Book Value
1
$ 36,000.00
66.67%
$24000
$ 12,000.00
2
$ 12,000.00
66.67%
$8000
$ 4,000.00
3
$ 4,000.00
$3000
$ 1,000.00
Depreciation expense for year ended Dec 31, 2017 = $ 24,000
The carrying Value of the machinery at Dec 31, 2017 = $ 12,000
Depreciation expense for year ended Dec 31, 2018 = $ 8,000
The carrying Value of the machinery at Dec 31, 2018 = $ 4,000
Depreciation expense for year ended Dec 31, 2019 = $ 3,000
The carrying Value of the machinery at Dec 31, 2019 = $ 1,000
A
Cost
$ 87,500.00
B
Residual Value
$ 1,500.00
C=A - B
Depreciable base
$ 86,000.00
D
Usage
800000 units
E
Depreciation per unit of copies
$0.1075 [ 86000/800000]
Year
Book Value
Usage
Depreciation expense
Ending Book Value
2017
$ 87,500.00
82000 copies
$ 8,815.00 [82000 x $0.1075]
$ 78,685.00
2018
$ 78,685.00
98000 copies
$ 10,535.00 [98000 x $0.1075]
$ 68,150.00
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