Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 10, Problem 2APSA
Problem 1O-2A
Depreciation methods
P1
A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,600 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be
Required
Prepare a table with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
Check Year 4 units-of-production depreciation. $4,300; DDB depreciation, $12,187
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Students have asked these similar questions
Problem 8-2A (Algo) Depreciation methods LO P1
A machine costing $213,800 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 492,000 units of product during its life. It actually produces the
following units: 122,300 in Year 1, 123,600 in Year 2, 120,400 in Year 3, 135,700 in Year 4. The total number of units produced by the
end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its
estimated salvage value.
Required:
Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
(Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)
Complete this question by entering your answers in the tabs below.
Straight Line
Units of
Production
Compute depreciation for each year (and total…
hrs
Brief Exercise 8-4 (Algo) Depreciation expense using the units-of-production method LO 8-4
Clean Air Company makes and sells cloth masks. The company purchased a new automated sewing machine at the beginning of Year
1 for $74,000. The machine is expected to have a two-year useful life and a $20,400 salvage value. The expected mask production is
estimated at 107,200 masks. Actual print production for the two years was as follows:
Year 1
Year 2
Total
59,000
52,000
111,000
Required:
Compute the depreciation expense for each of the two years, using units-of-production depreciation.
Depreciation expense
Year 1
Year 2
Chapter 10 Solutions
Connect Access Card For Fundamental Accounting Principles
Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation
On...Ch. 10 - QS10-5 Double-declining-balance method P1
A...Ch. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures C3 1. Classify...Ch. 10 - Prob. 10QSCh. 10 - Natural resources and depletion P3 Perez Company...Ch. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6
Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1
New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10
Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13
Revising depreciation
C2
Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5
Gilly...Ch. 10 - Prob. 24ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A
Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A
Disposal of plant assets
C1 P1...Ch. 10 - Problem 1O7A
Natural resources
P3
On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4BPSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B
Disposal of plant assets
C1 P1 P2
On...Ch. 10 - Prob. 7BPSBCh. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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- Nonearrow_forwardExercise 10-13 (Algo) Revising depreciation LO C2 Apex Fitness Club uses straight-line depreciation for a machine costing $21,050, with an estimated four-year life and a $2,250 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $1,800 salvage value. 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the machine's book value at the end of its second year. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. Book Value at the End of Year 2: Cost Accumulated depreciation 2 years Book value at point of revision $ 0arrow_forwardExercise 10-5 Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $43,500. The machine's useful life is estimated at 10 years, or 385,000 units of product, Units-of-production with a $5,000 salvage value. During its second year, the machine produces 32,500 units of product. Deter- mine the machine's second-year depreciation using the units-of-production method. depreciation P1 Exorcise 10-6arrow_forward
- Ashvinarrow_forward10arrow_forwardQuestion Content Area A machine with a cost of $69,200 has an estimated residual value of $4,463 and an estimated life of 5 years or 17,037 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method? a. $27,680.00 b. $16,608.00 c. $13,840.00 d. $25,894.80arrow_forward
- CHAPTER 14 – DEPRECIATION CLASSWORK Student Name: Date: 1) A Dutch petroleum company purchased a barge for $1,300,000. The estimated life in 20 years, at which time it will have a salvage value of $200,000. Find (a) The annual amount of depreciation using the straight-line method (b) The book value at the end of 5 years 2) A bottle-capping machine costs $88,000, has an estimated life of 8 years, and has a scrap value of $16,000. Use the straight-line method of depreciation to find (a) The annual rate of depreciation (b) The annual amount of depreciation (c) The book value at the end of the first year 3) The new computer equipment at Capital Curb and Concrete has a cost of $14,500, an estimated life of 8 years, and a scrap value of $2100. Find (a) the annual depreciation and (b) the book value at the end of 4 years using the straight- line method of depreciation.arrow_forwardQuestion 4arrow_forwardKnowledge Check 01 A company purchases a machine for $10,000. The estimated residual value is $4,000, and the estimated service life is 4 years or 10,000 units. The company uses the straight-line method of depreciation. The depreciable cost of the asset is: Multiple Choice O $1,000 $1,500 $6,000 $10,000arrow_forward
- Exercise 10-24 On December 31, 2020, Vaughn Inc. has a machine with a book value of $1,353,600. The original cost and related accumulated depreciation at this date are as follows. Machine $1,872,000 Less: Accumulated depreciation 518,400 Book value $1,353,600 Depreciation is computed at $86,400 per year on a straight-line basis.Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. Your answer is partially correct. Try again. A fire completely destroys the machine on August 31, 2021. An insurance settlement of $619,200 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If…arrow_forwardUWorld ROGER mos6 as BARRAD Multiple Choice O O X Company had been depreciating a machine with an original cost of $125,000 and a salvage value of $15,000 over its estimated useful life of 10 years using straight line depreciation. At the beginning of the seventh year, X Company determined that the machine will actually remain in use for a total of 12 years and will have a salvage value of $5,000 How much depreciation will X Company recognize in the seventh year? O $9,167 $7,333 $9,000 CPA Review O $10,000 Soved Help Save & Exitarrow_forwardQUESTION 7 Equipment costing $70,000 with a salvage value of $14,000 and an estimated life of eight years has been depreciated using the straight-line method for two years. Assuming a revised estimated total life of five years and no change in the salvage value, the depreciation expense for year three would be $14,000. $11,200. $ 8,400. $18,667.arrow_forward
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