Question

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2. Kaeo Koal Company, Inc. purchased a new mining machine at a total cost of $1,800,000 on the first day of its fiscal year. The firm estimates that the machine has a useful life of six years or 8,000,000 tons of coal and a residual value of $120,000 at the end of its useful life. The following schedule indicates the actual number of tons of coal mined with the machine per year: (Click the icon to view the schedule.) Read the requirements Requirement a. Prepare the depreciation schedule for the machine assuming that Kaeo Koal used the straight-line method. Depreciation Expense Original Cost End-of-Year Accumulated Depreciation End-of-Year Net Book Value (NBV) Year Total Requirement b. Prepare the depreciation schedule for the machine assuming that Kaeo Koal used the units-of-output method. (Enter the rate per unit to the nearest cent. Enter all other amounts to the nearest dollar.) Tons Rate End-of-Year of per Depreciation Expense Original Cost End-of-Year Accumulated Depreciation Net Book Value (NBV) Year Coal Unit Total

Answer 1

Cost = 1; 800,000 Ulue 69ата. Besidual value = 120,000 line method Straight Depreciation per year Cost - Besidual Value life 1,800,000 - 120,000 S $ 280,000. Depreciation schedule. Year Depreciation Expense Original cost a Accumalated Son depreciation . End NBV a 280, DODF de 1,800,00D 280,000 1.800, DDD 280,00D L. 800,000 230,000 1,800,000 280,000 1,800,000 280,000 1,800,000 1,680,000 2 30,000 1,5 20,000 560,00 0 , 240,000 840,000 960,000 11,20,000 680,000 1,400,000 400,000 1,680,00D 120,000 Total

units of output method. Depreciation - Cost - Residual Value Total tons per ton 2 1,800,00D – 120,000 8, DOD, DOD $ 0.21 per ton -Year Tons of coal Bate Depriation Original Acumabited NBV unit Expense. | cost | depreciation End) Per 1. 6 20,0000 -2 130,200 1800.000 130 200 16698 DO 1,390,000 0.21291900 1800,000 422,100 1377900 3 1,640,000 0.21 344,400 1300,000366500 103 3 500 41030,000 0.21 216,300 1800,000 982800 817200 5 770,000 0.21161, 700 800.000 1144500 655500 6.12,550,000. 10-21 535,500 1 BOD.000 1680,000 | 120,000

Depreciation rate JOD X2 33.33% Year Beginning Dep NBV | Rate Depreciation Expense Accumalated depreciation End NBV 1800,00D33-33599940 599,940 1200060 33.33 400020 999,960 800040 33.33 266680 1266640 533,360 33.33 177,786.67 1444,426-67 355,573.3 33.33 1185 2444 1562951.11 2370486 89 33-33 117048.89 1680,000. 1,200,060 800040 533,360 355,573.33 237048.89 120,000 5 6 @ Sale. Straight | Units of Output Double in Sale Value NBY at the end of year 3. 938000 1960000 938000 1033 500 938000 533, 360. V منه)) Gain/Lo66) 122000) |( 95.500 404640,

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