On January 1, 2018, a machine was purchased for $120,000. The machine has an estimated salvage value of $9,600 and an estimated useful life of 5 years. The machine can operate for 120,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 24,000 hrs; 2019, 30,000 hrs; 2020, 18,000 hrs; 2021, 36,000 hrs; and 2022, 12,000 hrs.
Compute the annual depreciation charges over the machine’s life
assuming a December 31 year-end for each of the following
depreciation methods. (Round answers to 0 decimal
places, e.g. 45,892.)
1. | Straight-line Method | $ | ||
2. | Activity Method | |||
Year | ||||
2018 | $ | |||
2019 | $ | |||
2020 | $ | |||
2021 | $ | |||
2022 | $ | |||
3. | Sum-of-the-Years'-Digits Method | |||
Year | ||||
2018 | $ | |||
2019 | $ | |||
2020 | $ | |||
2021 | $ | |||
2022 | $ | |||
4. | Double-Declining-Balance Method | |||
Year | ||||
2018 | $ | |||
2019 | $ | |||
2020 | $ | |||
2021 | $ | |||
2022 | $ |
Assume a fiscal year-end of September 30. Compute the annual
depreciation charges over the asset’s life applying each of the
following methods. (Round answers to 0 decimal places,
e.g. 45,892.)
Year |
Straight-line Method |
Sum-of-the-years'-digits method |
Double-declining-balance method |
|||
2018 | $ | $ | $ | |||
2019 | ||||||
2020 | ||||||
2021 | ||||||
2022 | ||||||
2023 |
1. straight line method = (cost – salvage value)/estimated life = (120000-9600)/5 = $22080
2. Activity method
2018 (120000-9600)/120000*24000 |
$22080 |
2019 (120000-9600)/120000*30000 |
$27600 |
2020 (120000-9600)/120000*18000 |
$16560 |
2021 (120000-9600)/120000*36000 |
$33120 |
2022 (120000-9600)/120000*12000 |
$11040 |
3. Sum-of-the-Years'-Digits Method
Sum-of-the-Years'-Digits = 5+4+3+2+1 = 15
2018 (120000-9600)*5/15 |
$36800 |
2019 (120000-9600)*4/15 |
$29440 |
2020 (120000-9600)*3/15 |
$22080 |
2021 (120000-9600)*2/15 |
$14720 |
2022 (120000-9600)*1/15 |
$7360 |
4. Double-Declining-Balance Method
Depreciation rate = 1/estimated life * 2 = 1/5 *2 = 40%
2018 (120000*40%) |
$48000 |
2019 (120000-48000)*40% |
$28800 |
2020 (120000-48000-28800)*40% |
$17280 |
2021 (120000-48000-28800-17280)*40% |
$10368 |
2022 ((120000-48000-28800-17280-10368)-9600 |
$5952 |
Part B
Straight-line Method |
Sum-of-the-Years'-Digits Method |
Double-Declining-Balance Method |
|
2018 |
16560 |
27600 |
36000 |
2019 |
22080 |
31280 |
33600 |
2020 |
22080 |
23920 |
20160 |
2021 |
22080 |
16560 |
12096 |
2022 |
22080 |
9200 |
7258 |
2023 |
5520 |
1840 |
1286 |
22080*9/12 = 16560
22080*3/12 = 5520
(120000-9600)*5/15*9/12= 27600
((120000-9600)*5/15*3/12)+((120000-9600)*4/15*9/12) = 31280
((120000-9600)*4/15*3/12)+((120000-9600)*3/15*9/12) = 23920
((120000-9600)*3/15*3/12)+((120000-9600)*2/15*9/12) = 16560
((120000-9600)*2/15*3/12)+((120000-9600)*1/15*9/12) = 9200
((120000-9600)*1/15*3/12) = 1840
(120000*40%)*9/12 = 36000
(120000-36000)*40% = 33600
(120000-36000-33600)*40% = 20160
(120000-36000-33600-20160)*40% = 12096
(120000-36000-33600-20160-12096)*40% = 7258
(120000-36000-33600-20160-12096-7258)-9600 = 1286
On January 1, 2018, a machine was purchased for $120,000. The machine has an estimated salvage...
On January 1, 2015, a machine was purchased for $96,300. The machine has an estimated salvage value of $6,420 and an estimated useful life of 5 years. The machine can operate for 107,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 21,400 hrs; 2016, 26,750 hrs; 2017, 16,050 hrs; 2018, 32,100 hrs; and 2019, 10,700 hrs. Compute the annual depreciation charges over the machine’s life assuming...
On January 1, 2015, a machine was purchased for $99,900. The machine has an estimated salvage value of $6,660 and an estimated useful life of 5 years. The machine can operate for 111,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 22,200 hrs; 2016, 27,750 hrs; 2017, 16,650 hrs; 2018, 33,300 hrs; and 2019, 11,100 hrs. Part 1 Your answer is correct. Compute the annual depreciation...
On January 1,2018, a machine was purchased for $100,000. The machine has an estimated salvage value of $5,920 and an estimated useful life of 5 years. The machine can operate for 112,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 22,400 hrs; 2019, 28,000 hrs; 2020, 16,800 hrs; 202 1, 33,600 hrs; and 2022, 11,200 hrs. (a) Compute the annual depreciation charges over the machine's life...
On January 1, 2015, a machine was purchased for $102,600. The machine has an estimated salvage value of $6,840 and an estimated useful life of 5 years. The machine can operate for 114,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 22,800 hrs; 2016, 28,500 hrs; 2017, 17,100 hrs; 2018, 34,200 hrs; and 2019, 11,400 hrs. B. ssume a fiscal year-end of September 30. Compute the...
Problem 11-11 On January 1, 2015, a machine was purchased for $90,900. The machine has an estimated salvage value of $6,060 and an estimated useful life of 5 years. The machine can operate for 101,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 20,200 hrs; 2016, 25,250 hrs; 2017, 15,150 hrs; 2018, 30,300 hrs; and 2019, 10,100 hrs. Compute the annual depreciation charges over the machine’s...
Problem 11-11 On January 1, 2015, a machine was purchased for $90,900. The machine has an estimated salvage value of $6,060 and an estimated useful life of 5 years. The machine can operate for 101,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 20,200 hrs; 2016, 25,250 hrs; 2017, 15,150 hrs; 2018, 30,300 hrs; and 2019, 10,100 hrs. Compute the annual depreciation charges over the machine’s...
On January 1, 2014, a machine was purchased for $120,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 6 years. The machine can operate for 200,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2014, 35,000 hrs; 2015, 45,000 hrs; 2016, 55,000 hrs; 2017, 30,000 hrs; 2018, 20,000 hrs; 2019, 15,000 hrs. (a) Compute the annual depreciation charges over the...
On January 1, 2015, a machine was purchased for $101,700. The machine has an estimated salvage value of $6,780 and an estimated useful life of 5 years. The machine can operate for 113,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 22,600 hrs; 2016, 28,250 hrs; 2017, 16,950 hrs; 2018, 33,900 hrs; and 2019, 11,300 hrs.Please show calculations for all problems below. 1) Compute the annual...
On January 1, 2015, a machine was purchased for $96,300. The machine has an estimated salvage value of $6,420 and an estimated useful life of 5 years. The machine can operate for 107,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 21,400 hrs; 2016, 26,750 hrs; 2017, 16,050 hrs; 2018, 32,100 hrs; and 2019, 10,700 hrs. Your answer is partially correct. Try again. Assume a fiscal...
Problem 11-11 (Part Level Submission) On January 1, 2015, a machine was purchased for $97,200. The machine has an estimated salvage value of $6,480 and an estimated useful life of 5 years. The machine can operate for 108,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2015, 21,600 hrs; 2016, 27,000 hrs; 2017, 16,200 hrs; 2018, 32,400 hrs; and 2019, 10,800 hrs. (a) Compute the annual depreciation...