uction was as follows: 16,280 units in 2022; 23,680 units in 2023; 20,720 units in 2024; 13,320 units in 2025. owing is the comparative balance sheet presentation of the net book value of the production machine at December 31 for e of the asset's life, using three alternative depreciation methods (items a to c):
uction was as follows: 16,280 units in 2022; 23,680 units in 2023; 20,720 units in 2024; 13,320 units in 2025. owing is the comparative balance sheet presentation of the net book value of the production machine at December 31 for e of the asset's life, using three alternative depreciation methods (items a to c):
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Grove Company acquired a production machine on January 1, 2022, at a cost of $540,000. The machine is expected to have a four-
year useful life, with a salvage value of $104,000. The machine is capable of producing 74,000 units of product in its lifetime. Actual
production was as follows: 16,280 units in 2022; 23,680 units in 2023; 20,720 units in 2024; 13,320 units in 2025.
Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each
year of the asset's life, using three alternative depreciation methods (items a to c):
Required:
Identify the depreciation method used for each of the following comparative balance sheet presentations (items a to c). If a declining-
balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to
determine how much has been depreciated each year. Remember that December 31, 2022, is the end of the first year.)
a.
b.
C.
Production Machine, Net of Accumulated Depreciation
Depreciation Method
At December 31
2023
2024
213,000
322,000
182,480 304,560
135,000
2025
104,000
104,000
104,000 104,000
2022
431,000
444,080
270,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90eb1610-f188-4898-9074-e74ef7815b36%2F9c808d67-a478-48bb-85c4-f0e6c71d650d%2Fc755vii_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Grove Company acquired a production machine on January 1, 2022, at a cost of $540,000. The machine is expected to have a four-
year useful life, with a salvage value of $104,000. The machine is capable of producing 74,000 units of product in its lifetime. Actual
production was as follows: 16,280 units in 2022; 23,680 units in 2023; 20,720 units in 2024; 13,320 units in 2025.
Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each
year of the asset's life, using three alternative depreciation methods (items a to c):
Required:
Identify the depreciation method used for each of the following comparative balance sheet presentations (items a to c). If a declining-
balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to
determine how much has been depreciated each year. Remember that December 31, 2022, is the end of the first year.)
a.
b.
C.
Production Machine, Net of Accumulated Depreciation
Depreciation Method
At December 31
2023
2024
213,000
322,000
182,480 304,560
135,000
2025
104,000
104,000
104,000 104,000
2022
431,000
444,080
270,000
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