d Company purchased a machine on January 2, Year 1, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During Year 1, Lord produced 12,000 units in 2,500 hours. In Year 2, Lord produced 15,000 units in 3,000 hours. d. Prepare a schedule showing depreciation expense for Year 1 and Year 2 and the book value of the asset at the end of Year 1 and Year 2 for the sum-of-the-years'-digits method. Round your answers to the nearest dollar. LORD COMPANY Depreciation Schedule Sum-of-the-years'-digits Beginning Book Value Depreciation Ending Book Value Year 1 $fill in the blank 224433079faf01e_1 $fill in the blank 224433079faf01e_2
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.
Lord Company purchased a machine on January 2, Year 1, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During Year 1, Lord produced 12,000 units in 2,500 hours. In Year 2, Lord produced 15,000 units in 3,000 hours. d. Prepare a schedule showing
LORD COMPANY
Depreciation Schedule
Sum-of-the-years'-digits
Beginning Book Value Depreciation Ending Book Value
Year 1 $fill in the blank 224433079faf01e_1
$fill in the blank 224433079faf01e_2
$fill in the blank 224433079faf01e_3
Year 2 $fill in the blank 224433079faf01e_4
$fill in the blank 224433079faf01e_5
$fill in the blank 224433079faf01e_6
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