NAME Class Activity 6 Depreciation O Shaughnessy ACCT 201 FA17 estimated useful
ID: 2567426 • Letter: N
Question
NAME Class Activity 6 Depreciation O Shaughnessy ACCT 201 FA17 estimated useful life of eight years or 5.5 million units. The equipment is estimated to have a salvage value of $48,300. During the current year, 700,000 units were produced I. Bella Beauty Company purchased a machine valued at $565,000 on July 1. The equipment has an Calculate the depreciation expense for the current year assuming the company uses: a. The straight-line method of depreciation. b. The units-of-production method of depreciation. e. The double-declining balance method of depreciation. 2 of the current year, a company acquired and placed in service a machine at a cost S700,000. It has been estimated that the machine has a service life of eight years and a salvage value of $40,000. Using the double-declining-balance method of depreciation, prepare a schedule showing depreciation amounts for the current year and the next four years (round answers to the nearest dollar). The company closes its books on December 31 of each year Depreciation for the Periocd End of Period Beginning of Period Book Depreciation Depreciation Accumulated Year Value Rate eExpense Depreciation Book ValueExplanation / Answer
1) Straight line method of depreciation a. (565,000- 48300)/8 64587.5 Depreciation expense 64,587.5*6/12 32294 b. units of production method of depreciation (565000-48300)/5,500,000 0.093945 Depreciation expense = 0.093945*700,000 65762 c. Double declining method 1/8*2 25% Depreciation expense = 565000*25%*6/12 70625 Beginning Depreciation Dep Accumulated Book 2) of period rate expense dep value Year BV 1 700,000 25% 175000 175,000 525,000 2 525,000 25% 131250 306,250 393,750 3 393,750 25% 98438 404688 295313 4 295313 25% 73828 478516 221484 5 221484 25% 55371 533887 166113
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