On October 1, 2013, the Allegheny Corporation purchased machinery for $115,000. The estimated service life of the machinery is 10 years and the estimated residual value is $5,000. The machine is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2013 and 2014 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. Round all computations to the nearest dollar. 1. Straight-line. 2. Sum-of-the-years' digits. 3. Double-declining balance. 4. One hundred fifty percent declining balance. 5, Units of production (units produced in 2013, 10,000; units produced in 2014, 25,000).

On October 1, 2013, the Allegheny Corporation purchased machinery for $115,000. The estimated service life of the machinery is 10 years and the estimated residual value is $5,000. The machine is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2013 and 2014 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. Round all computations to the nearest dollar. 1. Straight-line. 2. Sum-of-the-years' digits. 3. Double-declining balance. 4. One hundred fifty percent declining balance. 5, Units of production (units produced in 2013, 10,000; units produced in 2014, 25,000).

Name: E 11-3Depreciationmethods; partialyearsLO2On October 1, 2013, the All
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Description: E 11-3Depreciationmethods; partialyearsLO2On October 1, 2013, the Allegheny Corporation purchased machinery for $115,000. The estimated service lifeof the machinery is 10 years and the estimated residual value is $5,000. The machine is expected to p

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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

E 11-3
Depreciation
methods; partial
years
LO2
On October 1, 2013, the Allegheny Corporation purchased machinery for $115,000. The estimated service life
of the machinery is 10 years and the estimated residual value is $5,000. The machine is expected to produce
220,000 units during its life.
Required:
Calculate depreciation for 2013 and 2014 using each of the following methods. Partial-year depreciation
is calculated based on the number of months the asset is in service. Round all computations to the nearest
dollar.
1. Straight-line.
2. Sum-of-the-years' digits.
3. Double-declining balance.
4. One hundred fifty percent declining balance.
5. Units of production (units produced in 2013, 10,000; units produced in 2014, 25,000).

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