Answered: ALL 3 and last part posted in writing !…

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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ALL 3 and last part posted in writing !

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-declining-balance.

	DDB Depreciation for the Period	End of Period
Year	Beginning of Period Book Value	Depreciation Rate	Depreciation Expense	Accumulated Depreciation	Book Value
Year 1			%			$0
Year 2			%			0
Year 3			%			0
Year 4			%			0
Total				$0

A machine costing $216,800 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 492,000 units of product during its life. It actually produces the following units: 121,600 in Year 1, 122,500 in Year 2, 121,000 in Year 3, 136,900 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. *(Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)*

**Instructions:**
Complete this question by entering your answers in the tabs below.

- **Straight Line**
- **Units of Production**
- **DDB (Double Declining Balance)**

### Units of Production

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of Production method.

| Year | Units | Depreciable Units | Depreciation per unit | Depreciation Expense |
|-------|--------|-------------------|-----------------------|----------------------|
| Year 1| 121,600| | | |
| Year 2| 122,500| | | |
| Year 3| 121,000| | | |
| Year 4| 136,900| | | |
| Total | | | | $0 |

_Navigate using the buttons_: `< Straight Line` | `DDB >`

### Depreciation Calculation for a Machine

A machine costing $216,800 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 492,000 units of product during its life. It actually produces the following units:
- 121,600 in Year 1
- 122,500 in Year 2
- 121,000 in Year 3
- 136,900 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 for all years combined) for the machine under each depreciation method. (Round per unit depreciation to 2 decimal places. Round answers to the nearest whole dollar.)

#### Instructions:
Complete this question by entering your answers in the tabs below.

### Depreciation Methods:
1. Straight Line
2. Units of Production
3. Double Declining Balance (DDB)

#### Straight-Line Depreciation Table

| Year | Depreciation Expense |
|--------|----------------------|
| Year 1 | |
| Year 2 | |
| Year 3 | |
| Year 4 | |
| Total | $0 |

Use the navigation to switch between different depreciation methods.

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