Required information [The following information applies to the questions displayed below.] At the beginning of the year, Mitt Corporation bought machinery, shelving, and a forklift. The machinery initially cost $30,800 but had to be overhauled (at a cost of $2,240) before it could be installed (at a cost of $1,120) and finally put into use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $480 in each year. The shelving cost $9,950 and was expected to last 5 years, with a residual value of $730. The forklift cost $16,650 and was expected to last six years, with a residual value of $2,260. 5. Compute double-declining-balance depreciation expense for years 1 and 2 for the forklift. TIP: Remember that the formula for double-declining-balance uses cost minus accumulated depreciation (not residual value). Double-declining-balance Year 1 Year 2
Required information [The following information applies to the questions displayed below.] At the beginning of the year, Mitt Corporation bought machinery, shelving, and a forklift. The machinery initially cost $30,800 but had to be overhauled (at a cost of $2,240) before it could be installed (at a cost of $1,120) and finally put into use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $480 in each year. The shelving cost $9,950 and was expected to last 5 years, with a residual value of $730. The forklift cost $16,650 and was expected to last six years, with a residual value of $2,260. 5. Compute double-declining-balance depreciation expense for years 1 and 2 for the forklift. TIP: Remember that the formula for double-declining-balance uses cost minus accumulated depreciation (not residual value). Double-declining-balance Year 1 Year 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
At the beginning of the year, Mitt Corporation bought machinery, shelving, and a forklift. The machinery initially cost
$30,800 but had to be overhauled (at a cost of $2,240) before it could be installed (at a cost of $1,120) and finally put into
use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery
was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $480 in each year.
The shelving cost $9,950 and was expected to last 5 years, with a residual value of $730. The forklift cost $16,650 and
was expected to last six years, with a residual value of $2,260.
5. Compute double-declining-balance depreciation expense for years 1 and 2 for the forklift. TIP: Remember that the formula for
double-declining-balance uses cost minus accumulated depreciation (not residual value).
Double-declining-balance
Year 1
Year 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd66efc02-9e22-44ae-83c8-fd9add31d92b%2Fd6559435-605d-4932-ac4d-25e9507cea5b%2Fyvszfrln_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
At the beginning of the year, Mitt Corporation bought machinery, shelving, and a forklift. The machinery initially cost
$30,800 but had to be overhauled (at a cost of $2,240) before it could be installed (at a cost of $1,120) and finally put into
use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery
was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $480 in each year.
The shelving cost $9,950 and was expected to last 5 years, with a residual value of $730. The forklift cost $16,650 and
was expected to last six years, with a residual value of $2,260.
5. Compute double-declining-balance depreciation expense for years 1 and 2 for the forklift. TIP: Remember that the formula for
double-declining-balance uses cost minus accumulated depreciation (not residual value).
Double-declining-balance
Year 1
Year 2
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