Subic Company purchased factory equipment on October 1, 2017 costing P960, 000. Inview of pending technological developments it is estimated that the machine will have aresale value upon disposal in four and one half years of P70,000 and the disposal cost willbe P10,000.Estimated useful life: Service hours. 8,000Actual operations (machine was retired at end of four and one half years)hours.service hours2017.1,0002000|2018.Required: Compute depreciation expense for 2017 and 2018 using:a. Service hours depreciationb. SYDc. Straight Lined. DDP

Depreciation is the reduction in the value of the asset due to the wear and tear of the asset. There…

Answered: Subic Company purchased factory…

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?
On January 2, 2010, Sayre Company purchased a machine for $45,000. The machine has a five-year estimated useful life and a $3,000 estimated residual value. In addition, the company expects the machine to produce 200,000 units. Assuming that the machine produced 35,000 and 45,000 units during 2010 and 2011, respectively, complete the following chart. Depreciation Expense1st Year Depreciation Expense2nd Year Accumulated Depreciation Carrying (Book) Value Straight-Line Method Units-of-Production Method Double Declining Balance Method
Acquisition of a new machine cost #680,000. Delivery, installation, and other expenses cost 15% of the purchasing cost. The machine has a useful life of 15 years with a scrap value of P85,000. Using the SYD method, what is the book value of the machine after 13 years? A P127,056.50 B P102,425.00 C P144,026.90 D P115,500.10
Bramble Corp. purchased Machine no. 201 on May 1, 2020. The following information relating to Machine no. 201 was gathered at the end of May: Price Credit terms Freight-in costs Preparation and installation costs Labour costs during regular production operations $72,000 2/10, n/30 $700 $3,200 $9,000 It was expected that the machine could be used for 10 years, after which the residual value would be zero. However, Bramble intends to use the machine for only eight years and expects to then be able to sell it for $1,500. The invoice for Machine no. 201 was paid on May 5, 2020. Bramble has a December 31 year end. Depreciation expense should be calculated to the nearest half month. Bramble follows IFRS for financial statement purposes. Calculate the depreciation expense for the years indicated using the following methods. (Do not round intermediate calculations and round final answers to O decimal places, e.g. 5,275.) 1. Straight-line method for the fiscal years ended December 31, 2020 and…
Required information [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $249,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 Year 1 2 3 4 5 6 Total 23456 3 4 5 6 Hours Used 2,900 1,800 1,900 2,100 1,900 1,900 2. Prepare a depreciation schedule for six years using the double-declining- balance method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Accumulated Expense Depreciation Book Value

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