A machine costing $212,200 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 483,000 units of product during its life. It actually produces the following units: 121,900 in Year 1, 124,000 in Year 2, 121,500 in Year 3, 125,600 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 Period Year Beginning of Period Book Depreciation Rate Depreciation Expense Accumulated Book Value Depreciation Value Year 1 % $ 0 Year 2 % 0 Year 3 % 0 Year 4 % 0 Total $ 0 < Units of Production Double declining balance
A machine costing $212,200 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 483,000 units of product during its life. It actually produces the following units: 121,900 in Year 1, 124,000 in Year 2, 121,500 in Year 3, 125,600 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 Period Year Beginning of Period Book Depreciation Rate Depreciation Expense Accumulated Book Value Depreciation Value Year 1 % $ 0 Year 2 % 0 Year 3 % 0 Year 4 % 0 Total $ 0 < Units of Production Double declining balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:A machine costing $212,200 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 483,000 units of product during its life. It actually produces the
following units: 121,900 in Year 1, 124,000 in Year 2, 121,500 in Year 3, 125,600 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
Period
Year
Beginning of
Period Book
Depreciation
Rate
Depreciation
Expense
Accumulated
Book Value
Depreciation
Value
Year 1
%
$
0
Year 2
%
0
Year 3
%
0
Year 4
%
0
Total
$
0
< Units of Production
Double declining balance
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