At the beginning of 2018, Lindy Weink, the controller of Cullumber Inc., reviewe

Question

At the beginning of 2018, Lindy Weink, the controller of Cullumber Inc., reviewed the expected useful life and residual value of two of the company's machines and proposed changes as follows: Useful Life (in years)Residual Value Machine Date Acquired Cost $804,100 $112,250 Original Proposed Original Proposed $38,040 $63,150 $3,853 #1 Jan. 1, 2008 20 25 Jan. 1, 2016 4 $5,430 Calculate the annual depreciation for each asset using the straight-line method and the original useful life and residual value Machine 1 $ Machine 2$ LINK TO TEXT Calculate the accumulated depreciation and carrying amount of each asset on December 31, 2017 Machine 1 Machine 2 Accumulated depreciation Carrying amount

Explanation / Answer

Annual depreciation :

Machine 1 = (804100-38040/20) = 38303

Machine 2 = (112250-5430/5) = 21364

calculate accumlated depreciation and carrying amount :

Machine 1 Machine 2 Accumlated depreciation 38303*10=383030 21364*2 = 42728 Carrying amount (804100-383030) = 421070 (112250-42728) = 69522

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