Bucker Company purchased a fabrication machine on January 1, 2020 for $55,000. The machine is expected to                 have an estimated useful of 5 years or 100,000 units produced. The machine is expected to have a residual value                 of $5,000 after the five years of use.                                   a. Calculate the amount of depreciation each year using the straight-line method.                 b. Calculate the depreciation each year using the units-of-production method given the following usage:                 2020: 22,000 units; 2021: 23,000 units; 2022: 21,000 units; 2023: 19,000 units; 2024: 15,000 units                 c. Calculate the depreciation each year using the double-declining balance method.                 d. Which of the three methods results in the lowest net income for 2021?                 e. Which of the three methods resuls in the lowest net income for 2024?                                   ***Note: round all final answers to the nearest whole dollar

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
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Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11PA: Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and...
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  Bucker Company purchased a fabrication machine on January 1, 2020 for $55,000. The machine is expected to              
  have an estimated useful of 5 years or 100,000 units produced. The machine is expected to have a residual value              
  of $5,000 after the five years of use.              
                 
  a. Calculate the amount of depreciation each year using the straight-line method.              
  b. Calculate the depreciation each year using the units-of-production method given the following usage:              
  2020: 22,000 units; 2021: 23,000 units; 2022: 21,000 units; 2023: 19,000 units; 2024: 15,000 units              
  c. Calculate the depreciation each year using the double-declining balance method.              
  d. Which of the three methods results in the lowest net income for 2021?              
  e. Which of the three methods resuls in the lowest net income for 2024?              
                 
  ***Note: round all final answers to the nearest whole dollar              

 

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