WireDot Inc. is a manufacturer of specialized machinery. WireDot purchased a new stamping machine at the beginning of the year at a cost of $720,000. The estimated residual value was $76,800. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 268,000 units. Actual annual production was as follows: Year Units 1 78,000 2 66,000 3 30,000 4 58,000 5 36,000 Required: 1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round your intermediate calculations.) a. Straight-line. Year Depreciation Accumulated Expense Net Depreciation Book Value At acquisition 1 2 3 4 5
WireDot Inc. is a manufacturer of specialized machinery. WireDot purchased a new stamping machine at the beginning of the year at a cost of $720,000. The estimated residual value was $76,800. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 268,000 units. Actual annual production was as follows: Year Units 1 78,000 2 66,000 3 30,000 4 58,000 5 36,000 Required: 1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round your intermediate calculations.) a. Straight-line. Year Depreciation Accumulated Expense Net Depreciation Book Value At acquisition 1 2 3 4 5
Chapter1: Financial Statements And Business Decisions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:WireDot Inc. is a manufacturer of specialized machinery. WireDot purchased a new stamping machine at the beginning of the year at a
cost of $720,000. The estimated residual value was $76,800. Assume that the estimated useful life was five years, and the estimated
productive life of the machine was 268,000 units. Actual annual production was as follows:
Year Units
1 78,000
2
66,000
3 30,000
4
58,000
5 36,000
Required:
1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round your intermediate calculations.)
a. Straight-line.
Year
Depreciation Accumulated
Expense
Net
Depreciation
Book Value
At acquisition
1
2
3
4
5
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