Provide correct answer general account Metlock Co. purchased equipment for $258,915 on October 1, 2017. Itis estimated that the equipment will have a useful life of 8 years and asalvage value of $14,760. The estimated production is 39,700 units andthe estimated working hours are 19,900. During 2017, Metlock uses theequipment for 530 hours and the equipment produces 1,000 units.Compute the depreciation expense under the following method:Activity method (working hours) for 2017. Metlock is on a calendar-yearbasis ending December 31.

Step 1: Definition of Activity Method of DepreciationActivity method depreciation is a way of…

Answered: Metlock Co. purchased equipment for…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Telimos purchased a machinery for 315,000 on May 1,2017. It is estimated that it will have a useful life of 10 years,salvage value of 15,000, production of 240,000 units, and workinghours of 25,000. During 2018 it uses the machinery for 2,650 hours, and the machinery produces 25,500 units. From the information given, compute the depreciation charge for 2018 under each of the following methods. (Round to the nearest dollar.) as per units of output, working hours and declining balance method with 20% as annual rate.
Kingbird Co. purchased machinery for $170,100 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, a salvage value of $14,700, production of 76,400 units, and working hours of 40,300. In 2017, the company used the machinery for 13,702 hours and the machinery produced 14,516 units. Compute the depreciation under the working hours method.
Silverman Company purchased machinery for $162,000 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $15,000, production of 84,000 units, and working hours of 42,000. During 2017, the company uses the machinery for 14,300 hours, and the machinery produces 20,000 units. Compute depreciation under the straight-line, units-of-output, working hours, sum-of-the-years’-digits, and double-declining-balance methods.
On January 1, 2017, Bushong Company purchased equipment at a cost of $12,600. The equipment had an estimated useful life of 6 years or 30,000 hours. The equipment will have a $1,200 salvage value at the end of its life. The equipment was used 6,500 hours in 2017. The depreciation expense for the year ending December 31, 2017, using the units-of-production method would be a.$2,470. b.$2,730. c.$3,800. d.$6,500.
Wynn Furnance Corp. purchased machinery for $345,000 on May 1, 2014. It is estimated that it will have a useful life of 10 years, scrap value of $45,000-production of 120,000 units and working hours of 12,500. During 2015 Wynn uses the machinery for 2,000 hours and the machinery produces 25,000 units. INSTRUCTION: From the information given, compute the depreciation charge for 2015 under each of the following methods (round to three decimal places) A). Straight-Line B). Units-of-output C). Working Hours D). Sum-of-the-years-digits E.) Declining-balance (use 20% as the annual rate)
Xanadu Company purchased a new machine on October 1, 2014, at a cost ofTk.96,000. The company estimated that the machine will have a residual value of Tk.12,000.Themachine is expected to be used for 10,000 working hours during its 5-year life.Requirements:Compute the depreciation expense under the following methods for the year indicated.(a) Straight-line for 2014.(b) Units-of-activity for 2014, assuming machine usage was 1,700 hours.(c) Declining-balance using double the straight-line rate for 2014 and 2015.
On April 1, 2017, Mills Company acquired equipment for $125,000. The estimated useful life is six years, and the estimated residual value is $5,000. Mills estimates that the equipment can produce 25,000 unts of product. During 2017 and 2018, respectively, 3,000 units and 4,200 units were produced. Mills reports on a calendar year basis. Required: Calculate depreciation expense for 2017 and 2018 under each of the following methods (ssume that Mills calculates depreciation to the nearest month in the year of acquisition): 1. Straight-line method. 2. Production method (units of output).
(Depreciation Computations—Five Methods, Partial Periods) Muggsy Bogues Company purchased equipment for $212,000 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,000. Estimated production is 40,000 units and estimated working hours are 20,000. During 2017, Bogues uses the equipment for 525 hours and the equipment produces 1,000 units.InstructionsCompute depreciation expense under each of the following methods. Bogues is on a calendar-year basis ending December 31.(a) Straight-line method for 2017.(b) Activity method (units of output) for 2017.(c) Activity method (working hours) for 2017.(d) Sum-of-the-years’-digits method for 2019.(e) Double-declining-balance method for 2018.
The Jefferson Co. purchased a machine on January 1, 2016. The machine cost $595,000. It had an estimated life of ten years, or 30,000 units, and an estimated residual value of $40,000. In 2016, Jeffries produced 3,000 units. Required: Compute the depreciation charge for 2016 using each of the following methods: a. Double-declining-balance methodb. Activity method (units of output)c. Sum-of-the-years'-digits methodd. Straight-line method
Mandall Company constructed a warehouse for $280,000 on January 2, 2017. Mandall estimates that the warehouse has a useful life of 20 years and no residual value. Construction records indicate that $40,000 of the cost of the warehouse relates to its heating, ventilation, and air conditioning (HVAC) system, which has an estimated useful life of only 10 years. What is the first year of depreciation expense using straightline component depreciation under IFRS?(a) $28,000. (c) $16,000.(b) $14,000. (d) $4,000

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