Banko Inc. manufactures sporting goods. The following information applies to a m
ID: 2564370 • Letter: B
Question
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, 2016:
Purchase price $ 70,000 Delivery cost $ 3,000 Installation charge $ 1,000 Estimated life 5 years Estimated units 140,000 Salvage estimate $ 4,000 During 2016, the machine produced 36,000 units and during 2017, it produced 38,000 units.
Determine the amount of depreciation expense for 2016 and 2017 using straight-line method.
Determine the amount of depreciation expense for 2016 and 2017 using double-declining-balance method.
Determine the amount of depreciation expense for 2016 and 2017 using units of production method.
Determine the amount of depreciation expense for 2016 and 2017 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.)
MACRS table:
a.Determine the amount of depreciation expense for 2016 and 2017 using straight-line method.
b.Determine the amount of depreciation expense for 2016 and 2017 using double-declining-balance method.
c.Determine the amount of depreciation expense for 2016 and 2017 using units of production method.
d.Determine the amount of depreciation expense for 2016 and 2017 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.)
MACRS table:
Year 5-Year property,% 7-Year property,% 1 20.00 14.29 2 32.00 24.49 3 19.20 17.49 4 11.52 12.49 5 11.52 8.93 6 5.76 8.92 7 8.93 8 4.46Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Amount Purchase Price 70,000.00 Delivery Cost 3,000.00 Installation Charge 1,000.00 Cost of Machine 74,000.00 a) Straight Line method Depreciation 2016 = (74000 -4000)/5 14,000.00 Depreciation 2017 = (74000 -4000)/5 14,000.00 b) double-declining-balance method Life in Years 5.00 Depreciation rate = 1/5*2 40% Particulars 2016 2017 Opening Balance 74,000.00 44,400.00 Depreciation at 40% 29,600.00 17,760.00 Closing balance 44,400.00 26,640.00 c) units of production method Depreciation per unit = (74000-4000)/140000 0.50 Depreciation 2016 = 36000*.50 18,000.00 Depreciation 2017 = 38000*.50 19,000.00 d) Depreciation 2016 = 74000*14.29% 10,574.60 Depreciation 2017 = 74000*24.49% 18,122.60
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