A machine that cost $400,000 has an estimated residual value of $40,000, an estimated useful life of five years, and estimated lifetime production of 20,00o0 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 5,000 hours in year 2, 4,000 hours in year 3, 2,000 hours in year 4, and 6,000 hours in year 5. Required: 1. Calculate the machine's depreciable cost. Depreciable Cost $ 54,000 2. Calculate the amount of depreciation expense that will be taken per each hour the machine is used. Estimated Lifetime Production Depreciation Rate Per Unit of Production Formula: Depreciable Cost Calculation: 3. Calculate the machine's depreciation expense, accumulated depreciation, and book value for all five years of the machine's useful life. Units for the Depreciation Rate per unit Depreciation Expense Accumulated Ending Book Depreciation Year Value Year 1: Year 2: Year 3: Year 4: Year 5: I || X x x x

A machine that cost $400,000 has an estimated residual value of $40,000, an estimated useful life of five years, and estimated lifetime production of 20,00o0 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 5,000 hours in year 2, 4,000 hours in year 3, 2,000 hours in year 4, and 6,000 hours in year 5. Required: 1. Calculate the machine's depreciable cost. Depreciable Cost $ 54,000 2. Calculate the amount of depreciation expense that will be taken per each hour the machine is used. Estimated Lifetime Production Depreciation Rate Per Unit of Production Formula: Depreciable Cost Calculation: 3. Calculate the machine's depreciation expense, accumulated depreciation, and book value for all five years of the machine's useful life. Units for the Depreciation Rate per unit Depreciation Expense Accumulated Ending Book Depreciation Year Value Year 1: Year 2: Year 3: Year 4: Year 5: I || X x x x

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Description: A machine that cost $400,000 has an estimated residual value of $40,000, an estimateduseful life of five years, and estimated lifetime production of 20,000 machine hours. Thecompany uses units-of-production depreciation and ran the machine 3,000 hou

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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