Can I have a step-by-step solution to this one too? 10. ABC Corp. purchased machinery with a cost of $70,000 at the beginning of 2018. The machinery has an estimated life of 25 years or 25,000 units of product. The estimated residual value is $7,500. During 2018, 1,100 units of product were produced with this machinery. A. Using units of production depreciation, calculate the total accumulated depreciation at 12/31/18. B. Using straight line depreciation, calculate the book value of the machine at the end of 2018.
Can I have a step-by-step solution to this one too? 10. ABC Corp. purchased machinery with a cost of $70,000 at the beginning of 2018. The machinery has an estimated life of 25 years or 25,000 units of product. The estimated residual value is $7,500. During 2018, 1,100 units of product were produced with this machinery. A. Using units of production depreciation, calculate the total accumulated depreciation at 12/31/18. B. Using straight line depreciation, calculate the book value of the machine at the end of 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Can I have a step-by-step solution to this one too?
10. ABC Corp. purchased machinery with a cost of $70,000 at the beginning of 2018. The machinery has an estimated life of 25 years or 25,000 units of product. The estimated residual value is $7,500. During 2018, 1,100 units of product were produced with this machinery.
A. Using units of production
B. Using straight line depreciation, calculate the book value of the machine at the end of 2018.
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