Winsey Company purchased equipment on January 2, 2019, for $700,000. The equipment has the following characteristics:   Estimated service life 20 years, 100,000 hours, 950,000 units of output Estimated residual value      $50,000   During 2019 and 2020, the company used the machine for 4,500 and 5,500 hours, respectively, and produced 40,000 and 60,000 units, respectively. Required: Compute depreciation expense for 2019 under each of the following methods: Round the depreciation rate per hour to 3 decimal places and depreciation rate per unit to 2 decimal places. If required, round your final answers to the nearest dollar. 1. Straight-line method $ fill in the blank 1 2. Activity method based on hours worked $ fill in the blank 2 3. Activity method based on units of output $ fill in the blank 3 4. Sum-of-the-years'-digits method $ fill in the blank 4 5. Double-declining-balance method $ fill in the blank 5 6. 150%-declining-balance method $ fill in the blank 6 Compute depreciation expense for 2020 under each of the following methods: Round the depreciation rate per hour to 3 decimal places and depreciation rate per unit to 2 decimal places. If required, round your final answers to the nearest dollar. 1. Straight-line method $ fill in the blank 7 2. Activity method based on hours worked $ fill in the blank 8 3. Activity method based on units of output $ fill in the blank 9 4. Sum-of-the-years'-digits method $ fill in the blank 10 5. Double-declining-balance method $ fill in the blank 11 6. 150%-declining-balance method $ fill in the blank 12 7. Next Level If Winsey used a service life of 16 years, 80,000 hours, or 750,000 units of output, what would be the effect on depreciation expense under the straight-line, sum-of-the-years'-digits, and declining-balance depreciation methods? If required, round your answers to the nearest dollar.   2019 2020 Straight-line method $ fill in the blank 13 $ fill in the blank 14 Activity method based on hours worked $ fill in the blank 15 $ fill in the blank 16 Activity method based on units of output $ fill in the blank 17 $ fill in the blank 18 Sum-of-the-years'-digits method $ fill in the blank 19 $ fill in the blank 20 Double-declining-balance method $ fill in the blank 21 $ fill in the blank 22 150%-declining-balance method $ fill in the blank 23 $ fill in the blank 24

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. Winsey Company purchased equipment on January 2, 2019, for $700,000. The equipment has the following characteristics:

     

    Estimated service life 20 years, 100,000 hours, 950,000 units of output
    Estimated residual value      $50,000

     

    During 2019 and 2020, the company used the machine for 4,500 and 5,500 hours, respectively, and produced 40,000 and 60,000 units, respectively.

    Required:

    Compute depreciation expense for 2019 under each of the following methods:

    Round the depreciation rate per hour to 3 decimal places and depreciation rate per unit to 2 decimal places. If required, round your final answers to the nearest dollar.

    1. Straight-line method $ fill in the blank 1
    2. Activity method based on hours worked $ fill in the blank 2
    3. Activity method based on units of output $ fill in the blank 3
    4. Sum-of-the-years'-digits method $ fill in the blank 4
    5. Double-declining-balance method $ fill in the blank 5
    6. 150%-declining-balance method $ fill in the blank 6

    Compute depreciation expense for 2020 under each of the following methods:

    Round the depreciation rate per hour to 3 decimal places and depreciation rate per unit to 2 decimal places. If required, round your final answers to the nearest dollar.

    1. Straight-line method $ fill in the blank 7
    2. Activity method based on hours worked $ fill in the blank 8
    3. Activity method based on units of output $ fill in the blank 9
    4. Sum-of-the-years'-digits method $ fill in the blank 10
    5. Double-declining-balance method $ fill in the blank 11
    6. 150%-declining-balance method $ fill in the blank 12

    7. Next Level If Winsey used a service life of 16 years, 80,000 hours, or 750,000 units of output, what would be the effect on depreciation expense under the straight-line, sum-of-the-years'-digits, and declining-balance depreciation methods?

    If required, round your answers to the nearest dollar.

      2019 2020
    Straight-line method $ fill in the blank 13 $ fill in the blank 14
    Activity method based on hours worked $ fill in the blank 15 $ fill in the blank 16
    Activity method based on units of output $ fill in the blank 17 $ fill in the blank 18
    Sum-of-the-years'-digits method $ fill in the blank 19 $ fill in the blank 20
    Double-declining-balance method $ fill in the blank 21 $ fill in the blank 22
    150%-declining-balance method $ fill in the blank 23 $ fill in the blank 24
     
 
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