Morgana Film Productions Inc. purchased a copier on Jan 1, 2011 for $12,700 with a residual value of $1500. Useful life is 5 years or 100,000 copies Copies produced in 2011: 13000 copies; in 2012: 15,000 copies Using the Activity/Units of Production Method, calculate: a) The Depreciation Expense in 2011 & 2012 $ in 2011 in 2012 b) Accumulated depreciation at the end of 2012 EA $ c) Book value at the end of 2012

Morgana Film Productions Inc. purchased a copier on Jan 1, 2011 for $12,700 with a residual value of $1500. Useful life is 5 years or 100,000 copies Copies produced in 2011: 13000 copies; in 2012: 15,000 copies Using the Activity/Units of Production Method, calculate: a) The Depreciation Expense in 2011 & 2012 $ in 2011 in 2012 b) Accumulated depreciation at the end of 2012 EA $ c) Book value at the end of 2012

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Description: Morgana Film Productions Inc. purchased a copier on Jan 1, 2011 for $12,700 with a residualvalue of $1500.Useful life is 5 years or 100,000 copiesCopies produced in 2011: 13000 copies; in 2012: 15,000 copiesUsing the Activity/Units of Production Met

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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Concept explainers

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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Question

Morgana Film Productions Inc. purchased a copier on Jan 1, 2011 for $12,700 with a residual
value of $1500.
Useful life is 5 years or 100,000 copies
Copies produced in 2011: 13000 copies; in 2012: 15,000 copies
Using the Activity/Units of Production Method, calculate:
a) The Depreciation Expense in 2011 & 2012
$
in 2011
in 2012
b) Accumulated depreciation at the end of 2012
c) Book value at the end of 2012

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