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. b. 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 activity method based on hours worked. LORD COMPANY Depreciation Schedule Activity method: Hours worked Beginning Book Value Depreciation Ending Book Value Year 1 $fill in the blank fd058a096fae012_1 70,000 $fill in the blank fd058a096fae012_2 7,500 $fill in the blank fd058a096fae012_3 Year 2 $fill in the blank fd058a096fae012_4 $fill in the blank fd058a096fae012_5 $fill in the blank fd058a096fae012_6
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. b. 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 activity method based on hours worked. LORD COMPANY Depreciation Schedule Activity method: Hours worked Beginning Book Value Depreciation Ending Book Value Year 1 $fill in the blank fd058a096fae012_1 70,000 $fill in the blank fd058a096fae012_2 7,500 $fill in the blank fd058a096fae012_3 Year 2 $fill in the blank fd058a096fae012_4 $fill in the blank fd058a096fae012_5 $fill in the blank fd058a096fae012_6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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. b. 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 activity method based on hours worked.
LORD COMPANY
Depreciation Schedule
Activity method: Hours worked
Beginning Book Value Depreciation Ending Book Value
Year 1 $fill in the blank fd058a096fae012_1
70,000
$fill in the blank fd058a096fae012_2
7,500
$fill in the blank fd058a096fae012_3
Year 2 $fill in the blank fd058a096fae012_4
$fill in the blank fd058a096fae012_5
$fill in the blank fd058a096fae012_6
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