Porker Company purchased a machine on January 2, 2022, by paying cash of $160,000. The machine has an estimated useful life of five years (or the production of 300,000 units) and an estimated residual value of $15,000. Required: 1. Determine depreciation expense (to the nearest dollar) for each year of the machine's useful life under (a). straight-line depreciation; and (b). the declining-balance method with a 200% acceleration rate. 2. What is the book value of the machine after three years with the declining-balance method and a 200% acceleration rate? 3. What is the net book value of the machinery after three years with straight-line depreciation. 4. If the machine was used to produce and sell 55,000 units in 2022, what would the depreciation expense be under the units of production method?

Porker Company purchased a machine on January 2, 2022, by paying cash of $160,000. The machine has an estimated useful life of five years (or the production of 300,000 units) and an estimated residual value of $15,000. Required: 1. Determine depreciation expense (to the nearest dollar) for each year of the machine's useful life under (a). straight-line depreciation; and (b). the declining-balance method with a 200% acceleration rate. 2. What is the book value of the machine after three years with the declining-balance method and a 200% acceleration rate? 3. What is the net book value of the machinery after three years with straight-line depreciation. 4. If the machine was used to produce and sell 55,000 units in 2022, what would the depreciation expense be under the units of production method?

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Description: Question 6Porker Company purchased a machine on January 2, 2022, by paying cash of $160,000. The machine hasan estimated useful life of five years (or the production of 300,000 units) and an estimated residual valueof $15,000.Required:1. Determine d

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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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