
Concept explainers
a. 1.
Calculate the
a. 1.

Explanation of Solution
Depreciation expense:
Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the consumption of economic benefits of long-term asset on account of its wear and tear or obsolescence.
Straight-line depreciation method:
The depreciation method which assumes that the consumption of economic benefits of long-term asset could be distributed equally throughout the useful life of the asset is referred to as straight-line method.
Compute the depreciation expense of machine per year using straight-line method.
The depreciation expense under the straight-line method is same for every year. Hence, $32,550 is the depreciation expense of the machine for all the four years 2012-2017.
a. 2.
Calculate the depreciation expense of the machine’s useful life for the period 2012-2017 under the double-declining balance method.
a. 2.

Explanation of Solution
Double-declining-balance method:
The depreciation method which assumes that the consumption of economic benefits of long-term asset is high in the early years but gradually declines towards the end of its useful life is referred to as double-declining-balance method.
Compute the depreciation expense of machine as on January 2, 2013 using double-declining balance method.
Compute the depreciation expense of machine as on January 2, 2014 using double-declining balance method.
Compute the depreciation expense of machine as on January 2, 2015 using double-declining balance method.
Compute the depreciation expense of machine as on January 2, 2016 using double-declining balance method.
Compute the depreciation expense of machine as on January 2, 2017 using double-declining balance method.
Working Note:
Compute the depreciation rate applied each year.
Useful life = 6 years
Note: Use 100% to represent depreciation in percentage. Multiply the depreciation rate with 2 as it is a double-declining method.
a. 3.
Calculate the depreciation expense of the machine’s useful life for the period 2012-2017 under the units-of-production balance method.
a. 3.

Explanation of Solution
Units-of-production method:
The depreciation method which assumes that the consumption of economic benefits of long-term asset is based on the production capacity or output is referred to as units-of-production method.
Compute the depreciation expense of machine for the year 2012 using units-of-production method.
Compute the depreciation expense of machine for the year 2013 using units-of-production method.
Compute the depreciation expense of machine for the year 2014 using units-of-production method.
Compute the depreciation expense of machine for the year 2015 using units-of-production method.
Compute the depreciation expense of machine for the year 2016 using units-of-production method.
Compute the depreciation expense of machine for the year 2017 using units-of-production method.
Working Note:
Compute the depreciation rate per plating.
b. 1.
Calculate the depreciation expense of the machine’s useful life for the period 2012-2018 under the straight-line depreciation method.
b. 1.

Explanation of Solution
Depreciation expense:
Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the consumption of economic benefits of long-term asset on account of its wear and tear or obsolescence.
Straight-line depreciation method:
The depreciation method which assumes that the consumption of economic benefits of long-term asset could be distributed equally throughout the useful life of the asset is referred to as straight-line method.
Compute the depreciation expense of machine for the year 2012 using straight-line method.
Compute the depreciation expense of machine for the year 2013 using straight-line method.
Compute the depreciation expense of machine for the year 2014 using straight-line method.
Compute the depreciation expense of machine for the year 2015 using straight-line method.
Compute the depreciation expense of machine for the year 2016 using straight-line method.
Compute the depreciation expense of machine for the year 2017 using straight-line method.
Compute the depreciation expense of machine for the year 2018 using straight-line method.
b. 2.
Calculate the depreciation expense of the machine’s useful life for the period 2012-2017 under the double-declining balance method.
b. 2.

Explanation of Solution
Double-declining-balance method:
The depreciation method which assumes that the consumption of economic benefits of long-term asset is high in the early years but gradually declines towards the end of its useful life is referred to as double-declining-balance method.
Compute the depreciation expense of machine as on December 31, 2012 using double-declining balance method.
Compute the depreciation expense of machine as on December 31, 2013 using double-declining balance method.
Compute the depreciation expense of machine as on December 31, 2014 using double-declining balance method.
Compute the depreciation expense of machine as on December 31, 2015 using double-declining balance method.
Compute the depreciation expense of machine as on December 31, 2016 using double-declining balance method.
Compute the depreciation expense of machine as on December 31, 2017 using double-declining balance method.
Compute the depreciation expense of machine as on September 1, 2018 using double-declining balance method.
Working Note:
Compute the depreciation rate applied each year.
Useful life = 6 years
Note: Use 100% to represent depreciation in percentage. Multiply the depreciation rate with 2 as it is a double-declining method.
Want to see more full solutions like this?
Chapter 9 Solutions
Financial Accounting for Undergraduates
- I am looking for the correct answer to this accounting question with appropriate explanations.arrow_forwardI am searching for the accurate solution to this financial accounting problem with the right approach.arrow_forwardI am looking for the correct answer to this general accounting problem using valid accounting standards.arrow_forward
- Hello tutor please given General accounting question answer do fast and properly explain all answerarrow_forwardChalmers Corporation operates in multiple areas of the globe, and relatively large price changes are common. Presently, the company sells 110,200 units for $50 per unit. The variable production costs are $20, and fixed costs amount to $2,079,500. Production engineers have advised management that they expect unit labor costs to rise by 10 percent and unit materials costs to rise by 15 percent in the coming year. Of the $20 variable costs, 25 percent are from labor and 50 percent are from materials. Variable overhead costs are expected to increase by 20 percent. Sales prices cannot increase more than 12 percent. It is also expected that fixed costs will rise by 10 percent as a result of increased taxes and other miscellaneous fixed charges. The company wishes to maintain the same level of profit in real dollar terms. It is expected that to accomplish this objective, profits must increase by 8 percent during the year. Required: Compute the volume in units and the dollar sales level…arrow_forwardAfter describing a threat/risk in either the revenue cycle (i.e., in sales and cash collection activities) or the expenditure cycle (i.e., in purchases or cash disbursement activities). What are specific internal controls that might be applied to mitigate each of the threats we've identified?arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





