Hello! I need help witht the following accounting question, thank you in advance! On January 1, 2022, Kingbird Company purchased the following two machines for use in its production process.**Machine A:**- The cash price of this machine was $40,000.- Related expenditures paid in cash included: - Sales tax: $2,250 - Shipping costs: $100 - Insurance during shipping: $70 - Installation and testing costs: $100 - Oil and lubricants for first-year operations: $100- Kingbird estimates the useful life of the machine is 5 years with a $4,400 salvage value at the end of that period.- Assume the straight-line method of depreciation is used.**Machine B:**- The recorded cost of this machine was $180,000.- Kingbird estimates the useful life of the machine is 4 years with a $11,520 salvage value at the end of that period. Calculate the amount of depreciation expense that Kingbird should record for Machine B each year of its useful life under the following assumptions. **(Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. 2,125.)**1. **Kingbird uses the straight-line method of depreciation.**2. **Kingbird uses the declining-balance method.** The rate used is twice the straight-line rate.3. **Kingbird uses the units-of-activity method** and estimates that the useful life of the machine is 162,000 units. Actual usage is as follows: 2022, 60,500 units; 2023, 45,500 units; 2024, 30,500 units; and 2025, 25,500 units.### Depreciation Expense| | 2022 | 2023 | 2024 | 2025 ||------|------|------|------|------|| **Straight-Line Method** | $ | $ | $ | $ || **Declining-Balance Method** | $ | $ | $ | $ || **Units-of-Activity Method** | $ | $ | $ | $ |Please fill in the appropriate values based on the depreciation method calculations.

The declining balance depreciation method applies a fixed percentage (often double the straight-line rate) to the asset's book value at the beginning of each period. This results in higher depreciation in the early years, gradually decreasing over time.Depreciation as per straight line method is as fallows = ( Asset value - Salvage value ) / usefull life ( 180000 - 11520 ) / 4 = 42120 Depreciation per year $42120 same for 4 yrs Depreciation under declining balance method is as fallows Usefull life of the asset given = 4 years Rate of depreciation = 1/4 = 0.25 In declining Balance Method = 2 × 0.25 = 0.50 That is 50% Depreciation for year 1 = 90000 180000 × 50% Depreciation for year 2 = 45000(180000 - 90000) × 50% Depreciation for year 3 = 22500(90000 - 45000) × 50%Depreciation for year 4 = 5780(45000 - 22500) × 50% Depreciation under units of activity method Cost of asset / no. of units 180000 / 162000 = 1.11Depreciation for year 1 = 67155 1.11 × 60500 Depreciation for year 2 = 505051.11 × 45500Depreciation for year 3 = 338551.11 × 30500Depreciation for year 4 = 283051.11 × 255002022202320242025Straight-line method $42120$42120$42120$42120Declining balance method $90000$45000$22500$5780Units of activity method $67155$50505$33855$28305Thanks Hope you understand

Business

Accounting

On January 1, 2022, Kingbird Company purchased the following two machines for use in its production process. Machine A: Machine B: The cash price of this machine was $40,000. Related expenditures also paid in cash included: sales tax $2,250, shipping costs $100, insurance during shipping $70, installation and testing costs $100, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Kingbird estimates that the useful life of the machine is 5 years with a $4,400 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. The recorded cost of this machine was $180,000. Kingbird estimates that the useful life of the machine is 4 years with a $11,520 salvage value remaining at the end of that time period.

On January 1, 2022, Kingbird Company purchased the following two machines for use in its production process. Machine A: Machine B: The cash price of this machine was $40,000. Related expenditures also paid in cash included: sales tax $2,250, shipping costs $100, insurance during shipping $70, installation and testing costs $100, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Kingbird estimates that the useful life of the machine is 5 years with a $4,400 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. The recorded cost of this machine was $180,000. Kingbird estimates that the useful life of the machine is 4 years with a $11,520 salvage value remaining at the end of that time period.

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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Question

Hello! I need help witht the following accounting question, thank you in advance!

On January 1, 2022, Kingbird Company purchased the following two machines for use in its production process.

**Machine A:**
- The cash price of this machine was $40,000.
- Related expenditures paid in cash included:
- Sales tax: $2,250
- Shipping costs: $100
- Insurance during shipping: $70
- Installation and testing costs: $100
- Oil and lubricants for first-year operations: $100
- Kingbird estimates the useful life of the machine is 5 years with a $4,400 salvage value at the end of that period.
- Assume the straight-line method of depreciation is used.

**Machine B:**
- The recorded cost of this machine was $180,000.
- Kingbird estimates the useful life of the machine is 4 years with a $11,520 salvage value at the end of that period.

Calculate the amount of depreciation expense that Kingbird should record for Machine B each year of its useful life under the following assumptions. **(Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0 decimal places, e.g. 2,125.)**

1. **Kingbird uses the straight-line method of depreciation.**

2. **Kingbird uses the declining-balance method.** The rate used is twice the straight-line rate.

3. **Kingbird uses the units-of-activity method** and estimates that the useful life of the machine is 162,000 units. Actual usage is as follows: 2022, 60,500 units; 2023, 45,500 units; 2024, 30,500 units; and 2025, 25,500 units.

### Depreciation Expense

| | 2022 | 2023 | 2024 | 2025 |
|------|------|------|------|------|
| **Straight-Line Method** | $ | $ | $ | $ |
| **Declining-Balance Method** | $ | $ | $ | $ |
| **Units-of-Activity Method** | $ | $ | $ | $ |

Please fill in the appropriate values based on the depreciation method calculations.

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