Gruman Company purchased a machine for $198,000 on January 2, Year 1. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In Year 1, Gruman uses the machine for 2,000 hours and produces 45,000 units. In Year 2, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar. For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2? Straight-line method Year 1 Year 2 Sum-of-the-years'-digits method Year 1 Year 2 Double-declining-balance method Year 1 $fill in the blank 15 Year 2 $fill in the blank 16 Activity method based on hours worked Year 1 $fill in the blank 17 Year 2 $fill in the blank 18 Activity method based on units of output Year 1 $fill in the blank 19 Year 2 $fill in the blank 20
Gruman Company purchased a machine for $198,000 on January 2, Year 1. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In Year 1, Gruman uses the machine for 2,000 hours and produces 45,000 units. In Year 2, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar. For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2? Straight-line method Year 1 Year 2 Sum-of-the-years'-digits method Year 1 Year 2 Double-declining-balance method Year 1 $fill in the blank 15 Year 2 $fill in the blank 16 Activity method based on hours worked Year 1 $fill in the blank 17 Year 2 $fill in the blank 18 Activity method based on units of output Year 1 $fill in the blank 19 Year 2 $fill in the blank 20
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Gruman Company purchased a machine for $198,000 on January 2, Year 1. It made the following estimates:
| Service life | 5 years or 10,000 hours |
| Production | 180,000 units |
| Residual value | $ 18,000 |
In Year 1, Gruman uses the machine for 2,000 hours and produces 45,000 units. In Year 2, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar.
- For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2?
- Straight-line method
Year 1 Year 2 - Sum-of-the-years'-digits method
Year 1 Year 2 - Double-declining-balance method
Year 1 $fill in the blank 15 Year 2 $fill in the blank 16 - Activity method based on hours worked
Year 1 $fill in the blank 17 Year 2 $fill in the blank 18 - Activity method based on units of output
Year 1 $fill in the blank 19 Year 2 $fill in the blank 20
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