Question

Question 1: Company MiniSun is a large air-condition manufacturer. On January 1st ,2013 the company buys a new machine. The cost of the machine totals to $40,000. Cost of delivery: $10,000. Salvage value is 0. The company uses the units of production method to calculate the annual depreciation expense. The machine is expected to manufacture a total of 150,000 units of air-conditions. At 2013 the company produced 31,000 units. At 2014 the company produced 12,000 units. At 2015 the company produced 8,000 units. After 3 years the company decides to sell the machine, the price received for it is $30,000. Required Calculate the Depreciation expense, Accumulated depreciation and Machine, net, for the machine for the first 3 years of its operation. a. 2013 2014 2015 Depreciation expense Accumulated depreciation Machine, net Calculate the gain/loss from the sale of the machine. b.

Answer 1

Anwer Voits. Of Aduction Method Under baits of production methal of vepriecial/on, Jepreciation is calulluted by comparing the actual production to the expected.. production units Depreciation : cost of Asset X Moduction Jyvim pored Estimale Botyl Rodychon in the question, it is given that, Cost Of Machine -__ $_(49000 + 10000) ? 60000 Estimaled Total Addiction fundamente 150000 yolda salvage Value 119_cally.lation_of_Depreciation. Expcake"., Accumulated Depeciation and Machine Net for the first_3 years of operation 9. Deprecisa9_Expense Depreciation of 2013 : $ 50000 x Blogo yajts to $ 1053 - Sgovo units - 4000 lepreciation of 2014 : $ swoo X 12000 1976 159000 units 2667 pentru popucciation of 2015 - - $59000 x Revoyaits 152000 unin

6. Aqce Of Accumulated Depecitor at the end of each year . Wher) we record the depreciation, we pasi entry Depreciation Alc__ py XX__ To Accumulated Depreciation is avail_xx This._mers that accumulated depreciation is 9909 by depreciation_qmount each years ... Balonce_of_Accymylpted Depreciation till 2013 - 10333 09110ce_of_Acermulated Depreciatzin Hill 2014 : 14333 Balance of Acumulatel_Depreciatin Hill 20151 : 17000 c. Balance in machine, Net at the end of 3 years Machine cant will remain same as the company yse accumulabel_depueciation method. It will remain $ soooo at the end of all three years' 2013 / 2015 I 2015 Depreciation Expense_ Laccymylate Depreciation I machine, Net 103334000 10333_114333 soooo 50000 2667 17000 SOOD 1b. Gallation_of_Goin or loss from the sale of machins Aftev j_years, the company rold Machine for $30000 Cost_of machine $ soooo -Accumulalel Depeciation (17000) 33000 : machine soll (30J0D - Loss on sale 3000 .. The company soll machine in loss for $2000