In recent years, Blue Spruce Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below. Machine 1 2 Acquired Jan. 1, 2020 July 1, 2021 Nov. 1, 2021 Cost $96,800 88,500 98,000 Salvage Value $ 13,000 12,000 8,000 Useful Life (in years) 8 5 6 Depreciation Method Straight-line Declining-balance Units-of-activity For the declining-balance method, Blue Spruce Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 45,000. Actual hours of use in the first 3 years were 2021, 700; 2022, 4,900; and 2023, 8,000.

In recent years, Blue Spruce Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below. Machine 1 2 Acquired Jan. 1, 2020 July 1, 2021 Nov. 1, 2021 Cost $96,800 88,500 98,000 Salvage Value $ 13,000 12,000 8,000 Useful Life (in years) 8 5 6 Depreciation Method Straight-line Declining-balance Units-of-activity For the declining-balance method, Blue Spruce Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 45,000. Actual hours of use in the first 3 years were 2021, 700; 2022, 4,900; and 2023, 8,000.

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 3MCQ: When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash...

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