A machine costing $212,200 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 488,000 units of product during its life. It actually produces the following units: 121,900 in Year 1, 123,400 in Year 2, 120,400 in Year 3, 132,300 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 Double- declining-balance.
A machine costing $212,200 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 488,000 units of product during its life. It actually produces the following units: 121,900 in Year 1, 123,400 in Year 2, 120,400 in Year 3, 132,300 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 Double- declining-balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A machine costing $212,200 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 488,000 units of product during its life. It actually produces the
following units: 121,900 in Year 1, 123,400 in Year 2, 120,400 in Year 3, 132,300 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 Double-
declining-balance.
Double-declining-balance Depreciation for the
End of Period
Year
Beginning of
Period Book
Period
Depreciation
Rate
Depreciation
Expense
Accumulated
Depreciation
Book Value
Value
Year 1
$
121,900
50%
$
121,900
Year 2
123,400
50%
123,400
Year 3
120,400
50%
120,400
Year 4
132,300
50%
132,300
Total
$
0
< Units of Production
Double declining balance >
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