Machine Acquired Jan 1, 2023 July 1, 2024 Nov. 1, 2024 Cost $126,500 75,000 79,200 Salvage Value $38,500 10,100 8,200 Useful Life (in years) 8 5 6 Depreciation Method Straight-line Declining-balance Units-of-activity
Machine Acquired Jan 1, 2023 July 1, 2024 Nov. 1, 2024 Cost $126,500 75,000 79,200 Salvage Value $38,500 10,100 8,200 Useful Life (in years) 8 5 6 Depreciation Method Straight-line Declining-balance Units-of-activity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject;: accounting
Transcribed Image Text:In recent years, Pharoah 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
(a)
3
Acquired
Jan 1, 2023
July 1, 2024
Nov 1, 2024
Cost
$126,500
75,000
79,200
STAN
Accumulated depreciation at
December 31
Salvage
Value
$38,500
10.100
S
8,200
Useful Life
(in years)
For the declining-balance method, Pharoah Company uses the double-declining rate. For the units-of-activity method, total machine
hours are expected to be 35,500. Actual hours of use in the first 3 years were: 2024, 770: 2025, 6,000, and 2026,7,800.
8
5
MACHINE 1
6
Compute the amount of accumulated depreciation on each machine at December 31, 2026.
Depreciation
Method
Straight-line
Declining-balance
Units-of-activity
MACHINE 2
MACHINE 3
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