In recent years, Oriole 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 3 (a1) Acquired Jan. 1.2020 July 1, 2021 Nov. 1, 2021 Depreciable cost $ For the declining-balance method, Oriole Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 43,000. Actual hours of use in the first 3 years were 2021, 500, 2022, 4,700; and 2023, 7,800. e Textbook and Media (b) Save for Later For Machine #3, calculate depreciable cost per hour under units-of-activity method. MACHINE 1 MACHINE 2 MACHINE 3 Compute the amount of accumulated depreciation on each machine at December 31, 2023. Save for Later Salvage Value Cost $95,300 $13.500 87,500 11,000 8.500 S Accumulated depreciation S 94,500 S e Textbook and Media Useful Life (in years) 8 5 6 Depreciation expense S Depreciation Method Straight-line Declining-balance Units-of-activity per hour (1) 2021 If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2021? In 2022? (2) 2022
In recent years, Oriole 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 3 (a1) Acquired Jan. 1.2020 July 1, 2021 Nov. 1, 2021 Depreciable cost $ For the declining-balance method, Oriole Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 43,000. Actual hours of use in the first 3 years were 2021, 500, 2022, 4,700; and 2023, 7,800. e Textbook and Media (b) Save for Later For Machine #3, calculate depreciable cost per hour under units-of-activity method. MACHINE 1 MACHINE 2 MACHINE 3 Compute the amount of accumulated depreciation on each machine at December 31, 2023. Save for Later Salvage Value Cost $95,300 $13.500 87,500 11,000 8.500 S Accumulated depreciation S 94,500 S e Textbook and Media Useful Life (in years) 8 5 6 Depreciation expense S Depreciation Method Straight-line Declining-balance Units-of-activity per hour (1) 2021 If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2021? In 2022? (2) 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:In recent years, Oriole 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
3
(a1)
Acquired
Jan. 1, 2020
July 1, 2021
Nov. 1, 2021
Depreciable cost S
e Textbook and Media
Save for Later
(b)
For the declining-balance method, Oriole Company uses the double-declining rate. For the units-of-activity method, total machine
hours are expected to be 43,000. Actual hours of use in the first 3 years were 2021, 500, 2022, 4,700; and 2023,7,800.
MACHINE 1 $
MACHINE 2
For Machine #3, calculate depreciable cost per hour under units-of-activity method.
Cost
$ 95,300
87,500
MACHINE 3 $
$
Save for Later
94,500
e Textbook and Media
Salvage
Value
$ 13,500
11,000
Accumulated depreciation
8.500
Compute the amount of accumulated depreciation on each machine at December 31, 2023.
Depreciation expense $
Useful Life
(in years)
8
5
6
Depreciation
Method
(1)
2021
Straight-line
Declining-balance
Units-of-activity
per hour
If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2021? In
2022?
(2)
2022
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