General Accounting Question solve this problem The cost of equipment purchased by Titan Tools Ltd. on July 1, 2021, is$120,000. It is estimated that the machine will have a $6,000 salvage valueat the end of its service life. Its service life is estimated at 10 years, itstotal working hours are estimated at 50,000, and its total production isestimated at 600,000 units. In 2021, the machine was operated for 4,500hours and produced 58,000 units. In 2022, the machine was operated for5,200 hours and produced 62,000 units.Requirement:Compute depreciation expense on the machine for the year ending December31, 2021, and the year ending December 31, 2022, using the straight-linemethod.

Step 1: Define Straight-Line DepreciationStraight-line depreciation is a method of allocating the…

Answered: The cost of equipment purchased by…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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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?
A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
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.
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?
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.
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.
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 the 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 it's service life. It's service life is estimated at 7 years, it's total working hours are estimated at 42,000, and it's total production is estimated at 525,000 units. During 2020, the machine was operated 5,500 hours and produced 48,000 units. Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45.892.) Sum of the years' digits for 2020 and 2021: Double-clicking balance(twice the straight-line rate) for 2020 and 2021:
The cost of equipment purchased by Bramble, Inc., on June 1, 2020, is $92.400. It is estimated that the machine will have a$ 8,400 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 2020, the machine was operated 6,900 hours and produced 63,200 units. During 2021, the machine was operated 6,320 hours and produced 55,200 units. Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, eg. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 (a) Straight-line (b) Units-of-output (c) Working hours (d) Sum-of-the-years-digits (e) Double-declining-balance (twice the straight-line rate) %24 %4 %24 %24 %24 %24 %24 %24 %24
The cost of equipment purchased by Concord, Inc., on April 1, 2020, is $127,00O. It is estimated that the machine will have a $7,000 salvage value at the end of its service life. Its service life is estimated at 6 years; its total working hours are estimated at 40,000; and its total production is estimated at 480,000 units. During 2020, the machine was operated 3,500 hours and produced 48,000 units. During 2021, the machine was operated 5,600 hours and produced 55,000 units. Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 (a) Straight-line 2$ 24 (b) Units-of-output %24 24 (c) Working hours 24 (d) Sum-of-the-years'-digits 24 (e) Double-declining-balance (twice the straight-line rate) 24 2$ %24 %24
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

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