For your analysis, you have been asked to compare methods based on a machine tha
ID: 2603328 • Letter: F
Question
For your analysis, you have been asked to compare methods based on a machine that cost $176,000. The estimated useful life is 10 years, and the estimated residual value is $33,440. The machine has an estimated useful life in productive output of 216,000 units. Actual output was 28,000 in year 1 and 24,000 in year 2. Required: 1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) a. Double Declining Method. Use exact numbers given please.
Explanation / Answer
Straight line method
Cost-salvage value/useful life of asset
Units of production method
Cost-salvage value/total no of units)*actual no of units
Double declining method
1/usefullife)*200%
1/5)*200%
40%
176000*40%70400
Balance=105600
105600*40%=42240
Balance=63360
Method of depreciation year1 year 2Straight line method
Cost-salvage value/useful life of asset
176000-33440/10=14256 176000-33440-14256/9=14256Units of production method
Cost-salvage value/total no of units)*actual no of units
176000-33440/216000)*28000=18480 176000-33440/216000)*24000=15840Double declining method
1/usefullife)*200%
1/5)*200%
40%
176000*40%70400
Balance=105600
105600*40%=42240
Balance=63360
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