In recent years, Flakeboard Company purchased three machines. Various amortization methods were selected. Information concerning the machines is summarized below: Machine Acquired Cost Jan. 1, 1999 $96,000 Jan. 1, 2000 60,000 Nov. 1, 2001 66,000 1 2 3 Residual Useful Life in Amortization Method Value $6,000 10,000 6,000 Years 10 8 6 Straight-line Declining-balance Units-of-activity For the declining-balance method, the company uses double the straight-line rate. For the units-of- activity method, total machine hours are expected to be 24,000. Actual hours of use in the first two years were 1,000 in 2001 and 4,500 in 2002. Instructions a) Calculate the amount of accumulated amortization on each machine at December 31, 2002. Round your answers to the nearest dollar. b) If Machine 2 has been purchased on April 1 instead of January 1, what would the amortization expense be for the machine in 1) 2000, 2) 2001, and 3) 2002?

In recent years, Flakeboard Company purchased three machines. Various amortization methods were selected. Information concerning the machines is summarized below: Machine Acquired Cost Jan. 1, 1999 $96,000 Jan. 1, 2000 60,000 Nov. 1, 2001 66,000 1 2 3 Residual Useful Life in Amortization Method Value $6,000 10,000 6,000 Years 10 8 6 Straight-line Declining-balance Units-of-activity For the declining-balance method, the company uses double the straight-line rate. For the units-of- activity method, total machine hours are expected to be 24,000. Actual hours of use in the first two years were 1,000 in 2001 and 4,500 in 2002. Instructions a) Calculate the amount of accumulated amortization on each machine at December 31, 2002. Round your answers to the nearest dollar. b) If Machine 2 has been purchased on April 1 instead of January 1, what would the amortization expense be for the machine in 1) 2000, 2) 2001, and 3) 2002?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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