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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 |
||||||||
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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