Carlisle Manufacturing, which uses a calendar year, purchased a machine for $60,000 on January 5, 2015. It estimates the machine will have a useful life of 10 years and a $6,000 residual value. The machine is expected to produce 250,000 units during its useful life. The actual number of units produced were 22,000 during 2015, 31,000 during 2016, 24,000 during 2017, and 30,000 during 2018. Using the straight-line method, what is the book value at December 31, 2017? Answer

Carlisle Manufacturing, which uses a calendar year, purchased a machine for $60,000 on January 5, 2015. It estimates the machine will have a useful life of 10 years and a $6,000 residual value. The machine is expected to produce 250,000 units during its useful life. The actual number of units produced were 22,000 during 2015, 31,000 during 2016, 24,000 during 2017, and 30,000 during 2018. Using the straight-line method, what is the book value at December 31, 2017? Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Wings Manufacturing Company purchased a new machine on July 1, 2016. It was expected to produce 200,000 units of product over its estimated useful life of eight years. Total cost of the machine was $600,000, and salvage value was estimated to be $60,000. Actual units produced by the machine in 2016 and 2017 are shown below: 2016 16,000 units 2017 30,000 units Wings reports on a calendar-year basis and uses the units-of-production method of depreciation. The amount of depreciation expense for this machine in 2017 would be a.$90,000. b.$74,520. c.$81,000. d.$124,200.
On June 30, 2024, Prego Equipment purchased a precision laser - guided steel punch that has an expected capacity of 300,000 units and no residual value. The cost of the machine was $450,000 and is to be depreciated using the units - of - production method. During the six months of 2024, 24, 000 units of product were produced. At the beginning of 2025, engineers estimated that the machine can realistically be used to produce only another 230,000 units. During 2025, 70,000 units were produced. The company would report depreciation in 2024 of: 1)$21, 950 2) $18,000 3) $43, 900 4)$36,000
Fleet Sports purchased a production machine with a cost of $180,000 at the beginning of 2019. Transportation costs to get the machine ready were $5,000. An additional $15,000 of labor costs were incurred to assemble the machine. The equipment has an estimated life of 10 years or 100,000 snowboards (units of product). The estimated residual value is $20,000. During 2019, 17,000 snowboards (units of product) were produced with this machinery. Determine the following, and show your work: 4.What is the book value of the equipment at the end of 2020 using straight-line depreciation? 5.What is depreciation expense for the equipment at the end of 2019 using double-declining balance depreciation? 6What journal entry is needed at the end of 2020 to record depreciation expense using double-declining balance depreciation?
A machine that produces cellphone components is purchased on January 1, 2024, for $163,000. It is expected to have a useful life of four years and a residual value of $11,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end. (a) Calculate the amount of depreciation to be charged each year, using each of the following methods: i. Straight-line method Straight-line method depreciation $ I per year ii. Units-of-production method (Round depreciation per unit to 3 decimal places, e.g. 15.257 and depreciation expense to O decimal places, e.g. 125.)
On January 1, 2014, Courier Inc. purchased new equipment that had a total cost (including shipping and installation) of $79,000. The equipment is expected to have a useful life of four years or produce a total of 119,000 units. At the end of its life, the equipment is expected to have a residual value of $4,400. The equipment is expected to produce 28,560 units in 2014; 30,940 units in 2015; 33,320 units in 2016; and 26,180 units in 2017. Courier Inc.'s fiscal year ends on December 31. In the table below, fill in the missing depreciation expense and accumulated depreciation amounts using the straight-line, double-declining-balance, and units-of-production methods. Do not round your intermediate calculation. When required, round your answers to the nearest dollar. Cost$79,000 Depreciation Expense Accumulated Depreciation Year Straight-lineMethod Double-Declining-Balance Method Unit-of-ProductionMethod Straight-lineMethod Double-Declining-Balance Method Unit-of-ProductionMethod…
A machine that produces cellphone components is purchased on January 1, 2024, for $171,000. It is expected to have a useful life of four years and a residual value of $12,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end. (a) Calculate the amount of depreciation to be charged each year, using each of the following methods: i. Straight-line method Straight-line method depreciation Senter a dollar amount per year per year ii. Units-of-production method (Round depreciation per unit to 3 decimal places, e.g. 15.257 and depreciation expense to 0 decimal places, e.g. 125.) Units-of-production method depreciation Senter a dollar amount per unit rounded to 3 decimal places per unit Year Depreciation Expense 2024 Senter a dollar amount 2025 Senter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount iii.…
Sweet Manufacturing purchased a machine on August 1, 2023 for use in its factory. Sweet paid $549,600 for the machine and estimated that it had a useful life of 10 years, at the end of which time the machine was expected to have a residual value of $48,000. During its life, the machine was expected to produce 264,000 units. During 2023, the machine produced 26,000 units, and produced 40,000 in 2024. The machine was subject to a 20% CCA rate, and Sweet's year-end was December 31. The machine is eligible for the Accelerated Investment Incentive. Calculate the annual depreciation amount for 2023 and 2024 using the Capital Cost Allowance method. Please ensure that your answer is correct.
A machine that cost $475,500, with a four-year life and an estimated $48,000 residual value, was installed in Haley Company’s factory on September 1, 2020. The factory manager estimated that the machine would produce 475,000 units of product during its life. It actually produced the following units: 2020, 21,000; 2021, 128,500; 2022, 125,000; 2023, 108,300; and 2024, 102,200. The company’s year-end is December 31.Required:Show the depreciation for each year and the total depreciation for the machine under each depreciation method calculated to the nearest whole month. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
Sonic Company has the following research and development activities during 2017-2020:In 2017, Sonic spent $400,000 to develop a new production process. It has applied for a patent for the new process and believed that it will be successful. Economic viability has not been achieved at end of 2017.On 1 February 2018, patent applied in 2017 was granted. Legal costs involved were $200,000. Patent was granted for 20 years where the developed process will be useful for the next ten years' operation.In the beginning of January 2019, there was infringement of patent by a competitor. Sonic spent $100,000 in defending against the patent infringement successfully. Sonic decided the patent can be used till the end of 2029.On 31 December 2020, Sonic estimated that the process only has a value-in-use of $200,000.RequiredPrepare all the journal entries to record the transactions during 2017-2020, including any amortization involved. Financial year end of the Sonic Company is 31 December.
On June 15, 2017, a second-hand machine was purchased for $187,000. Before being put into service, the equipment was overhauled at a cost of $9,800, and additional costs of $400 for direct material and $800 for direct labour were paid in fine-tuning the controls. The machine has an estimated residual value of $6,000 at the end of its five-year useful life. The machine is expected to operate for 100,000 hours before it will be replaced and is expected to produce 1.20 million units in this time. Operating data for the next six fiscal years are provided below. The company has an October 31 fiscal year end. Year 2017 2018 2019 2020 2021 2022 Hours of Operation 10,000 20,000 20,000 20,000 18,000 12,000 Units Produced 110,000 270,000 264,000 310,000 134,000 112,000 Calculate the depreciation charges for each fiscal year under each of the following depreciation methods. (Round unit-of-output per unit to 4 decimal places, e.g. 15.2345 and Round other answers to O decimal places, e.g. 5,275.)…
Machado Inc. purchased a new robotic drill for its assembly line operation. The total cost ofthe asset was $125,000, including shipping, installation, and testing. The asset is expected tohave a useful life of five years and a residual value of $10,000. The total service life, expressedin hours of operation, is 10,000 hours. The total output the machine is expected to produceover its life is 1,000,000 units.The asset was purchased on January 1, 2020, and it is now December 31, 2021. In 2021, theasset was used for 2,150 hours and it produced 207,000 units.Required: Calculate the 2021 depreciation charge using the following methods:a. Straight-lineb. Activity, based on units of inputc. Activity, based on units of productiond. Double declining balance
Bridgeport Manufacturing purchased a machine on January 1, 2023 for use in its factory. Bridgeport paid $536,000 for the machine and estimated that it had a useful life of 10 years, at the end of which time the machine was expected to have a residual value of $30,000. During its life, the machine was expected to produce 440,000 units. During 2023, the machine produced 47,400 units, and produced 67,800 in 2024. The machine was subject to a 20% CCA rate, and Bridgeport's year-end was December 31. The machine is eligible for the Accelerated Investment Incentive. Calculate the annual depreciation amount for 2023 and 2024 using the straight-line method. Annual depreciation amount $ 2023 $ 2024