Question

CengageNOW21Online teach 3-2 Homework Chapter 11A .com/mytakeAssignment/takeAssignmentMain.dolinvokers&itakeAssignmentSessionLocatore assigment-takeSinprogressefalse eBook Show Me How Caloater Print em Deprediation Methods Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates: 5 years or 10,000 hours Service ife Production 180,000 units Residual value $ 18,000 In 2016, Gruman uses the machine for 1,700 hours and produces 50,000 units. In 2017, Gruman uses the machine for 1,200 hours and produces 32,000 units. If required, round your final answers to the nearest d Required:

Answer 1

Only answers for question 2(d) and 2(e) are given as answers for questions 1 and 2(a), 2(b) and 2(c) are already done and same are correct

Answer 2(d)

2016 5| 2017 5| 167,400 145,800

Working:

Depreciation base = Cost of machine - residual value = 198000 - 18000 =$180,000

Depreciation rate per hour = 180000 / 10000 = $18.00

Depreciation for 2016 = 18.00 * 1700 = $30,600

Book value at the end of 2016 = 198000 - 30600 = $167,400

Depreciation for 2017 = 18.00 * 1200 = $21,600

Book value at the end of 2017 = 167400 -21600 = $145,800

Answer 2(d)

2016 $ 2017 $ 148,000 116,000

Working:

Depreciation base = Cost of machine - residual value = 198000 - 18000 =$180,000

Depreciation rate unit = 180000 / 180000 = $1.00

Depreciation for 2016 = 1.00 * 50000 = $50,000

Book value at the end of 2016 = 198000 - 50000 = $148,000

Depreciation for 2017 = 1.00 * 32000 = $32,000

Book value at the end of 2017 = 148000 - 32000 = $116,000