Exercise 11-4 (Algo) Other depreciation methods [LO11-2][The following information applies to the questions displayed below.]On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of theequipment is 10 years and the estimated residual value is $11,00O. The equipment is expected to produce 244,000 unitsduring its life.Required:Calculate depreciation for 2021 and 2022 using each of the following methods.Exercise 11-4 (Algo) Part 22. One hundred fifty percent declining balance. (Round final answers to the nearest whole dollar amount.)O Answer is complete but not entirely correct.DepreciationYearexpense202126,400 X202222,440 X Required InformationExercise 11-4 (Algo) Other depreciation methods [LO11-2][The following information applies to the questions displayed below.]On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of theequipment is 10 years and the estimated residual value is $11,000. The equipment is expected to produce 244,000 unitsduring its life.Required:Calculate depreciation for 2021 and 2022 using each of the following methods.Exercise 11-4 (Algo) Part 33. Assume instead the equipment was purchased on October 1, 2021. Calculate depreciation for 2021 and 2022 using each of the twomethods. Partial-year depreciation is calculated based on the number of months the asset is in service. (Do not round intermediateanswers and round your answers to the nearest whole dollar amount.)* Answer is complete but not entirely correct.20212022Sum-of-the-years' digits2$26,400 X $22,440 XOne hundred fifty percent declining balance$32,000 X $28,800 X

On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of the equipment is 10 years and the estimated residual value is $11,000. The equipment is expected to produce 244,000 units during its life. Required:

On January 1, 2021, the Allegheny Corporation purchased equipment for $187,000. The estimated service life of the equipment is 10 years and the estimated residual value is $11,000. The equipment is expected to produce 244,000 units during its life. Required:

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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Sum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?
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