Check my work Grove Company acquired a production machine on January 1, 2022, at a cost of $720,000. The machine is expected to have a four-year useful life, with a salvage value of $120,000. The machine is capable of producing 100,000 units of product in its lifetime. Actual production was as follows: 22,000 units in 2022; 32,000 units in 2023; 28,000 units in 2024; 18,000 units in 2025. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset's life, using three alternative depreciation methods (items a to c): Required: Identify the depreciation method used for each of the following comparative balance sheet presentations (items a to c). If a declining-balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to determine how much has been depreciated each year. Remember that December 31, 2022, is the end of the first year.) a. b. C. Production Machine, Net of Accumulated Depreciation Depreciation Method 2025 At December 31 2024 2023 2022 120,000 270,000 420,000 570,000 120,000 120,000 228,000 396,000 588,000 120,000 180,000 360,000
Check my work Grove Company acquired a production machine on January 1, 2022, at a cost of $720,000. The machine is expected to have a four-year useful life, with a salvage value of $120,000. The machine is capable of producing 100,000 units of product in its lifetime. Actual production was as follows: 22,000 units in 2022; 32,000 units in 2023; 28,000 units in 2024; 18,000 units in 2025. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset's life, using three alternative depreciation methods (items a to c): Required: Identify the depreciation method used for each of the following comparative balance sheet presentations (items a to c). If a declining-balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to determine how much has been depreciated each year. Remember that December 31, 2022, is the end of the first year.) a. b. C. Production Machine, Net of Accumulated Depreciation Depreciation Method 2025 At December 31 2024 2023 2022 120,000 270,000 420,000 570,000 120,000 120,000 228,000 396,000 588,000 120,000 180,000 360,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikarmbhai
Transcribed Image Text:Check my work
Grove Company acquired a production machine on January 1, 2022, at a cost of $720,000. The machine is
expected to have a four-year useful life, with a salvage value of $120,000. The machine is capable of producing
100,000 units of product in its lifetime. Actual production was as follows: 22,000 units in 2022; 32,000 units in
2023; 28,000 units in 2024; 18,000 units in 2025.
Following is the comparative balance sheet presentation of the net book value of the production machine at
December 31 for each year of the asset's life, using three alternative depreciation methods (items a to c):
Required:
Identify the depreciation method used for each of the following comparative balance sheet presentations (items a
to c). If a declining-balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the
balance sheet from right to left to determine how much has been depreciated each year. Remember that December
31, 2022, is the end of the first year.)
a.
b.
C.
Production Machine, Net of Accumulated Depreciation
Depreciation Method
2025
At December 31
2024
2023
2022
120,000
270,000
420,000
570,000
120,000
120,000
228,000 396,000
588,000
120,000
180,000
360,000
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