Provide calculation general accounting On January 1, 2018, McHenry Manufacturing Companypurchased a machine for $40,900,000. McHenry'smanagement expects to use the machine for 28,000 hours overthe next six years. The estimated residual value of the machineat the end of the sixth year is $44,000. The machine was usedfor 3,900 hours in 2018 and 5,900 hours in 2019. Calculate thebook value of the machine at the end of 2019 if the companyuses the units-of-production method of depreciation.A. $40,900,000B. $35,209,354C. $26,585,042D. $26,600,428

Step 1: Calculate the depreciable costDepreciable cost = Cost of the asset - Residual…

Answered: On January 1, 2018, McHenry…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
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8. On January 1, 2019, Sapphire Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $40,000. The schedule of usage of the machine is below. Year Usage 1 4,500 2 6,000 3 5,200 4 4,300 5 2,000 6 2,000 Prepare the depreciation schedule using the units-of-production method of depreciation.
Bucker Company purchased a fabrication machine on January 1, 2020 for $55,000. The machine is expected to have an estimated useful of 5 years or 100,000 units produced. The machine is expected to have a residual value of $5,000 after the five years of use. a. Calculate the amount of depreciation each year using the straight-line method. b. Calculate the depreciation each year using the units-of-production method given the following usage: 2020: 22,000 units; 2021: 23,000 units; 2022: 21,000 units; 2023: 19,000 units; 2024: 15,000 units c. Calculate the depreciation each year using the double-declining balance method. d. Which of the three methods results in the lowest net income for 2021? e. Which of the three methods resuls in the lowest net income for 2024?
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On January 3, 2020, Xenex Innovations purchased computer equipment for $145,000. The equipment will be used in research and development activities for five years or a total of 10,000 hours and then sold for about $24,000.Assume actual usage in hours of: 2020 2021 2022 2023 2024 1,850 1,880 3,400 3,080 3,700 1. Calculate depreciation expense and book values for each year of the equipment’s life for each method of depreciation using the table provided below. Xenex’s year-end is December 31. (Please don't round intermediate calculations, image attached for reference) 2. Analysis Component Which method will result in the greatest (Image 2 attached for reference) a. Total assets being reported on the balance sheet in 2020? in 2023? b. Operating expenses being reported on the income statement in 2020? in 2023?
On October 1, 2021, the Allegheny Corporation purchased equipment for $123,000. The estimated service life of the equipment is 10 years and the estimated residual value is $2,000. The equipment is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. Units of production (units produced in 2021, 11,000; units produced in 2022 26,000). (Round “Depreciation per unit rate” answers to 2 decimal places.) Select formula for Units of Production Depreciation: _____________________________________________ Calculate 2021 depreciation expense: Depreciation per unit rate _______________ Units produced in 2021 ________________ Depreciation in 2021 ________________ Calculate 2022 depreciation expense: Depreciation per unit rate…

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