Complete the following table given this information: (Do not round intermediate calculations.) Cost of machine $ 94,000 Residual value $ 4,000 Useful life 5 years Estimated units machine will produce 100,000 Actual production: Year 1 Year 2 60,000 15,000 Depreciation Expense Method Year 1 Year 2 Straight line Units of production Declining balance MACRS (5-year class)
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.
Complete the following table given this information: (Do not round intermediate calculations.)
| Cost of machine | $ | 94,000 |
| Residual value | $ | 4,000 |
| Useful life | 5 years | |
| Estimated units machine will produce | 100,000 | |
| Actual production: | Year 1 | Year 2 |
| 60,000 | 15,000 | |
|
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
