Three different companies each purchased a machine on January 1, 2008, for $42,0
ID: 2774848 • Letter: T
Question
Three different companies each purchased a machine on January 1, 2008, for $42,000. Each machine was expected to last five years or 200,000 hours. Salvage value was estimated to be $2,000. All three machines were operated for 50,000 hours in 2008, 55,000 hours in 2009, 40,000 hours in 2010, 44,000 hours in 2011, and 31,000 hours in 2012. Each of the three companies earned $30,000 of cash revenue during each of the five years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.
Three different companies each purchased a machine on January 1, 2008, for $42,000. Each machine was expected to last five years or 200,000 hours. Salvage value was estimated to be $2,000. All three machines were operated for 50,000 hours in 2008, 55,000 hours in 2009, 40,000 hours in 2010, 44,000 hours in 2011, and 31,000 hours in 2012. Each of the three companies earned $30,000 of cash revenue during each of the five years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.
Explanation / Answer
-2000
Straight Line method Year Beginning Deprication End of year 2008 42000 8000 34000 2009 34000 8000 26000 2010 26000 8000 18000 2011 18000 8000 10000 2012 10000 8000 2000 Double declining value of depriciation Year Beginning Deprication End of the year 2008 42000 16800 25200 2009 25200 10080 15120 2010 15120 6048 9072 2011 9072 3629 5443 2012 5443.2 2177 3266 Units Production depriciatiom Year Beginning Deprication End of the year 2008 42000 10000 32000 2009 32000 11000 21000 2010 21000 8000 13000 2011 13000 8800 4200 2012 4200 6200-2000
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