Safari Fle Edit View History Bookmarks Window Help o.t. Ch 9 intro Part 1 Deprec

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Safari Fle Edit View History Bookmarks Window Help o.t. Ch 9 intro Part 1 Depreciation: Units-of-Production Methood A machine that cost $400,000 has an estimated residual value of $40,000, an estimated useful Iife of tive years, and estmated iMeime production of 20,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 5,000 hours in year 2, 4,000 hours in year 3,2,000 hours in year 4, and 6,000 hours in year 5. 1. Calculate the machine's depreciable cost 2. Calculate the amount of depreciation expense that will be taken per each hour the machine is used Cost 3. Calculato the machine's depreciation expense, aocumulated depreciation, and book value for all ive years of the machine's useful life sc F2

Explanation / Answer

1 Depreciable cost=400000-40000 = $360000 2 360000/20000= $18 3 Units Depreciation rate Depreciation expense Accumulated depreciation Ending book value 1 3000 18 54000 54000 346000 2 5000 18 90000 144000 256000 3 4000 18 72000 216000 184000 4 2000 18 36000 252000 148000 5 6000 18 108000 360000 40000

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