Problem 1 Part A ABC Company purchases a new machine for $50,000 on June 1. They

Question

Problem 1 Part A ABC Company purchases a new machine for $50,000 on June 1. They expect to use the machine for 5 years. The salvage or residual value is $2,500. What is the amount of depreciation ABC Company will record on December 31st if the company uses the straight-line depreciation method and has not recorded depreciation since the purchase on June 1 a) Straight Line Depreciation at Dec 31st (Rounded to nearest whole dollar)S Part B On January 1, a company purchases equipment for $85,000 that will be used for 5 years with a salvage or residual value is $1,000. The equipment is expected to produce 240,000 units over its lifetime. The company uses the units of production depreciation method and has not recorded depreciation since the purchase on Jan 1. a) What is the depreciation per unit? (Rounded to nearest cent or 2 decimal places) unit per b) What is the amount of depreciation expense to be recorded if the company actually produced 32,000 units in the first year? (Rounded to whole dollar) $

Explanation / Answer

Part A

Part B.

a)

b)

Cost machine $ 50,000 Less: Residual value $ (2,500) Depreciable value $ 47,500 Life of assets 5 years Depreciation per year ($47,500/5) $    9,500 Number of month used in current year 7 Depreciation for the year ($9,500/12*7) $    5,542

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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