On January 1, 2015, a machine was purchased for $97,200. The machine has an esti
ID: 2543707 • Letter: O
Question
On January 1, 2015, a machine was purchased for $97,200. The machine has an estimated salvage value of $6,480 and an estimated useful life of 5 years. The machine can operate for 108,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 21,600 hrs; 2016, 27,000 hrs; 2017, 16,200 hrs; 2018, 32,400 hrs; and 2019, 10,800 hrs.
(a)
LINK TO TEXT
(b)
Year
Straight-line Method
Sum-of-the-years'-digits method
Double-declining-balance method
On January 1, 2015, a machine was purchased for $97,200. The machine has an estimated salvage value of $6,480 and an estimated useful life of 5 years. The machine can operate for 108,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 21,600 hrs; 2016, 27,000 hrs; 2017, 16,200 hrs; 2018, 32,400 hrs; and 2019, 10,800 hrs.
Explanation / Answer
Straight Line Method Cost-Salvage Value/Estimated Years of life 97200-6480/5 18144 Activity Method Year Hourly Dep Hours(A) RATE (B) Dep Charge(A)*(B) 2015 (97200-6480)/108000 = .84 per Hour 21600 0.84 18144 2016 27000 0.84 22680 2017 16200 0.84 13608 2018 32400 0.84 27216 2019 10800 0.84 9072 Sum of the year digit method year Depreciable Amount Yearly Depreciation Calculation Dep Charge 2015 97200-6480= 90720 Depreciable amount*No of Years/sum of the years 90270*5/15 30090 2016 24072 2017 18054 2018 12036 2019 6018 Double Digit Method year Depreciable Rate Yearly Depreciation Calculation Dep Charge Book Value 2015 Straight Line rate *2 Cost * Depreciable Rate =20 *2 = 40 % =97200*.40 38880 58320 2016 23328 34992 2017 13996.8 20995.2 2018 8398.08 12597.12 2019 12597-salavge value 6117.12 6480 Salvage
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.