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Thomas Ramsey is the owner of Atlas Magazine. On January 1", Atlas Magazine purchased printing equipment for printing $89,000. The equipment is estimated to have a useful life of 4 years and a salvage value of $17,000. Thomas estimates the equipment will produce 500,000 magazines during its useful life. It produces the following units: 125,000 in year 1, 150,000, in year 2, 75,000 in year 3, and 100,000 in year 4. Required: Record your answers below, use the following page to show your work 1. Calculate depreciation expense and the book value at the end of the third year using the straight-line depreciation method. Depreciation expense: Book Value: 2. Calculate depreciation expense and the book value at the end of the second year usin the double declining balance depreciation method. Depreciation expense:_ X X Book Value: x 49,000 × 44, 500 = 39605 X

Thomas Ramsey is the owner of Atlas Magazine. On January 1", Atlas Magazine purchased printing equipment for printing $89,000. The equipment is estimated to have a useful life of 4 years and a salvage value of $17,000. Thomas estimates the equipment will produce 500,000 magazines during its useful life. It produces the following units: 125,000 in year 1, 150,000, in year 2, 75,000 in year 3, and 100,000 in year 4. Required: Record your answers below, use the following page to show your work 1. Calculate depreciation expense and the book value at the end of the third year using the straight-line depreciation method. Depreciation expense: Book Value: 2. Calculate depreciation expense and the book value at the end of the second year usin the double declining balance depreciation method. Depreciation expense:_ X X Book Value: x 49,000 × 44, 500 = 39605 X

FINANCIAL ACCOUNTING
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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Thomas Ramsey is the owner of Atlas Magazine. On January 1, Atlas Magazine purchased printing equipment for printing $89,000. The equipment is estimated to have a useful life of 4 years and a salvage value of $17,000. Thomas estimates the equipment will produce 500,000 magazines during its useful life. It produces the following units: 125,000 in year 1, 150,000, in year 2, 75,000 in year 3, and 100,000 in year 4. Required: Record your answers below, use the following page to show your work 1. Calculate depreciation expense and the book value at the end of the third year using the straight-line depreciation method. Depreciation expense: Book Value: 2. Calculate depreciation expense and the book value at the end of the second year usin the double declining balance depreciation method. Depreciation expense:_ X x Book Value: 49,000 × 44, 500 = 39605 X
Transcribed Image Text:Thomas Ramsey is the owner of Atlas Magazine. On January 1, Atlas Magazine purchased printing equipment for printing $89,000. The equipment is estimated to have a useful life of 4 years and a salvage value of $17,000. Thomas estimates the equipment will produce 500,000 magazines during its useful life. It produces the following units: 125,000 in year 1, 150,000, in year 2, 75,000 in year 3, and 100,000 in year 4. Required: Record your answers below, use the following page to show your work 1. Calculate depreciation expense and the book value at the end of the third year using the straight-line depreciation method. Depreciation expense: Book Value: 2. Calculate depreciation expense and the book value at the end of the second year usin the double declining balance depreciation method. Depreciation expense:_ X x Book Value: 49,000 × 44, 500 = 39605 X
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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