A machine costing $210,400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 123,000 in Year 1, 123,700 in Year 2, 121,300 in Year 3, 128,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Straight Line Units of Production Double declining balance Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Units of Production Year Units Depreciable Units Depreciation per unit Depreciation Expense Year 1 123,000 123,000 $ 0.40 $ 49,200 Year 2 123,700 123,700 $ 0.40 49,480 Year 3 121,300 121,300 $ 0.40 48,520 Year 4 128,000 0.40 Total 368,000 $ 147,200
A machine costing $210,400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 123,000 in Year 1, 123,700 in Year 2, 121,300 in Year 3, 128,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Straight Line Units of Production Double declining balance Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Units of Production Year Units Depreciable Units Depreciation per unit Depreciation Expense Year 1 123,000 123,000 $ 0.40 $ 49,200 Year 2 123,700 123,700 $ 0.40 49,480 Year 3 121,300 121,300 $ 0.40 48,520 Year 4 128,000 0.40 Total 368,000 $ 147,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need help with the Units of Production. The machine cannot be
Transcribed Image Text:A machine costing $210,400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the
following units: 123,000 in Year 1, 123,700 in Year 2, 121,300 in Year 3, 128,000 in Year 4. The total number of units produced by the
end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its
estimated salvage value.
Required:
Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.
Complete this question by entering your answers in the tabs below.
Straight Line
Units of
Production
Double
declining
balance
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of
production.
Units of Production
Year
Units
Depreciable
Units
Depreciation
per unit
Depreciation
Expense
Year 1
123,000
123,000 $
0.40
$
49,200
Year 2
123,700
123,700 $
0.40
49,480
Year 3
121,300
121,300 $
0.40
48,520
Year 4
128,000
0.40
Total
368,000
$
147,200
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