Cullumber Limited purchased a machine on account on April 1,2021, at an invoice price of $332,350. On April 2, it paid $2,040 for delivery of the machine. A one-year, $3,710 insurance policy on the machine was purchased on April 5.On April 19. Cullumber paid $7,860 for installation and testing of the machine. The machine was ready for use on April 30. Cullumber estimates the machine's useful life will be five years or 6,205 units with a residual value of $73.270. Assume the machine produces the following numbers of units each year: 958 units in 2021: 1,322 units in 2022; 1,393 units in 2023; 1,333 units in 2024; and 1,199 units in 2025. Cullumber has a December 31 year end. (a) Your answer is correct. Determine the cost of the machine. 342250 Cost of the machine
Cullumber Limited purchased a machine on account on April 1,2021, at an invoice price of $332,350. On April 2, it paid $2,040 for delivery of the machine. A one-year, $3,710 insurance policy on the machine was purchased on April 5.On April 19. Cullumber paid $7,860 for installation and testing of the machine. The machine was ready for use on April 30. Cullumber estimates the machine's useful life will be five years or 6,205 units with a residual value of $73.270. Assume the machine produces the following numbers of units each year: 958 units in 2021: 1,322 units in 2022; 1,393 units in 2023; 1,333 units in 2024; and 1,199 units in 2025. Cullumber has a December 31 year end. (a) Your answer is correct. Determine the cost of the machine. 342250 Cost of the machine
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cullumber Limited purchased a machine on account on April 1, 2021, at an invoice price of $332,350. On April 2, it paid $2,040 for
delivery of the machine. A one-year, $3,710 insurance policy on the machine was purchased on April 5. On April 19, Cullumber paid
$7,860 for installation and testing of the machine. The machine was ready for use on April 30.
Cullumber estimates the machine's useful life will be five years or 6,205 units with a residual value of $73,270. Assume the machine
produces the following numbers of units each year: 958 units in 2021: 1,322 units in 2022; 1,393 units in 2023; 1,333 units in 2024;
and 1,199 units in 2025. Cullumber has a December 31 year end.
(a)
Your answer is correct.
Determine the cost of the machine.
342250
Cost of the machine
Transcribed Image Text:175
(b)
Calculate the annual depreciation and total depreciation over the asset's life using: (Round the depreclation cost per unit to 2 decimal
places. Round answers to 0 decimal places, eg. 5,275)
(1) Straight-line method
Year
Depreciable Amount
Depreciation Expense
Accumulated Depreciation
Carrying Amoi
2021
$
2022
2023
2024
2025
2026
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