A machine costing $214,600 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 494,000 units of product during its life. It actually produces the following units: 122,300 in Year 1, 124,000 in Year 2, 119,800 in Year 3, 137,900 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 decimal places Round your depreciation t whole dollar
A machine costing $214,600 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 494,000 units of product during its life. It actually produces the following units: 122,300 in Year 1, 124,000 in Year 2, 119,800 in Year 3, 137,900 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 decimal places Round your depreciation t whole dollar
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4.
Subject :-Accounting

Transcribed Image Text:A machine costing $214,600 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 494,000 units of product during its life. It actually produces the
following units: 122,300 in Year 1, 124,000 in Year 2, 119,800 in Year 3, 137,900 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.

Transcribed Image Text:1
2
3
4
Straight Line
Year
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of
production.
Year
Year
Year
Year
Units of
Production
Total
Units
122,300
124,000
119,800
Double
declining
balance
137,900
Units of Production
Depreciable
Units
122,300
$
124,000 $
119,800
366,100
+
Depreciation
per unit
$
0.40
0.40
0.40
0.40
Depreciation
Expense
48,920
49,400
48,920
48,920
196,160
$
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