Calculate depreciation expense on the machine The cost of equipment purchased by Pauley Ltd. on July1, 2022, is $84,500. It is estimated that the machine willhave a $4,500 salvage value at the end of its service life.The estimated useful life is 8 years, with total workinghours estimated at 50,000, and total productionestimated at 600,000 units. In 2022, the machine wasoperated for 5,200 hours and produced 54,000 units. In2023, it was operated for 6,000 hours and produced62,000 units.Compute depreciation expense on the machine for theyears ending December 31, 2022, and 2023, using thestraight-line method.

Explanation of Straight-Line Depreciation:Straight-line depreciation is a method of allocating the…

Answered: The cost of equipment purchased by…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....

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Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.
Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.
Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
The cost of equipment purchased by Pauley Ltd. on July 1, 2022, is $84,500. It is estimated that the machine will have a $4,500 salvage value at the end of its service life. The estimated useful life is 8 years, with total working hours estimated at 50,000, and total production estimated at 600,000 units. In 2022, the machine was operated for 5,200 hours and produced 54,000 units. In 2023, it was operated for 6,000 hours and produced 62,000 units. Compute depreciation expense on the machine for the years ending December 31, 2022, and 2023, using the straight-line method. I want answer
The cost of equipment purchased by Oriole, Inc., on June 1, 2025, is $90,300. It is estimated that the machine will have a $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 600,000 units. During 2025, the machine was operated 7,260 hours and produced 66,550 units. During 2026, the machine was operated 6,655 hours and produced 58,000 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892) a. b. Straight-line Units-of-output C. Working hours d. Sum-of-the-years-digits $ $ to e. Double-declining-balance $ tA 2025 7000 9310 14520 21000 25826 $ $ $ GA $ 2026 12000 8120 13310 14850 18440
The cost of equipment purchased by Oriole, Inc., on June 1, 2025, is $90,300. It is estimated that the machine will have a $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 600,000 units. During 2025, the machine was operated 7,260 hours and produced 66,550 units. During 2026, the machine was operated 6,655 hours and produced 58,000 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892.) a. Straight-line b. Units-of-output C. Working hours d. Sum-of-the-years'-digits $ $ $ $ e. Double-declining-balance $ 2025 $ $ $ $ +A $ 2026
The cost of equipment purchased by Charleston, Inc., on June 1, 2025, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 525,000 units. During 2025, the machine was operated 6,000 hours and produced 55,000 units. During 2026, the machine was operated 5,500 hours and produced 48,000 units. Instructions Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026, using the following methods. a. Straight-line. b. Units-of-output. c. Working hours. d. Sum-of-the-years’-digits. e. Double-declining-balance
The cost of equipment purchased by Charleston, Inc., on January 1, 2020, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 525,000 units. During 2020, the machine was operated 6,000 hours and produced 55,000 units. During 2021, the machine was operated 5,500 hours and produced 48,000 units. Instructions: Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. a. Straight-line. b. Units-of-output. c. Working hours d. Sum-of-the-years’-digits. e. Declining-balance (twice the straight-line rate).
The cost of equipment purchased by Charleston, Inc., on June 1, 2020, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 525,000 units. During 2020, the machine was operated 6,000 hours and produced 55,000 units. During 2021, the machine was operated 5,500 hours and produced 48,000 units. Instructions Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. a. Straight-line. d. Sum-of-the-years’-digits. b. Units-of-output. e. Declining-balance (twice the straight-line rate). c. Working hours.

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