Waterway Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May. Price Credit terms Freight-in Preparation and installation costs Labor costs during regular production operations (a) It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Waterway intends to use the machine for only 8 years, however, after which it expects to be able to sell it for $2,070. The invoice for Machine #201 was paid May 5, 2020. Waterway uses the calendar year as the basis for the preparation of financial statements. (1) Straight-line method for 2020 (2) Compute the depreciation expense for the years indicated using the following methods. (3) $117,300 Sum-of-the-years'-digits method for 2021 2/10, n/30 Double-declining-balance method for 2020 $1,104 $5,244 $14,490 $ $ $ Depreciation Expense

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Waterway Company purchased Machine #201 on May 1, 2020. The following information relating to Machine # 201 was gathered at
the end of May.
Price
Credit terms
Freight-in
Preparation and installation costs
Labor costs during regular production operations
(a)
It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Waterway intends to use the
machine for only 8 years, however, after which it expects to be able to sell it for $2,070. The invoice for Machine #201 was paid May 5,
2020. Waterway uses the calendar year as the basis for the preparation of financial statements.
(1)
(2)
Compute the depreciation expense for the years indicated using the following methods.
(3)
Straight-line method for 2020
$117,300
Sum-of-the-years'-digits method for 2021
2/10, n/30
Double-declining-balance method for 2020
$1,104
$5,244
$14,490
$
LA
$
$
Depreciation Expense
Transcribed Image Text:Waterway Company purchased Machine #201 on May 1, 2020. The following information relating to Machine # 201 was gathered at the end of May. Price Credit terms Freight-in Preparation and installation costs Labor costs during regular production operations (a) It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Waterway intends to use the machine for only 8 years, however, after which it expects to be able to sell it for $2,070. The invoice for Machine #201 was paid May 5, 2020. Waterway uses the calendar year as the basis for the preparation of financial statements. (1) (2) Compute the depreciation expense for the years indicated using the following methods. (3) Straight-line method for 2020 $117,300 Sum-of-the-years'-digits method for 2021 2/10, n/30 Double-declining-balance method for 2020 $1,104 $5,244 $14,490 $ LA $ $ Depreciation Expense
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