Question

Exercise 11-4 Shamrock Corp. purchased machinery for $374,850 on May 1, 2017. It is estimated that it will have a useful life of 10 years, salvage value of $17,850, production of 285,600 units, and working hours of 25,000. During 2018, Shamrock Corp. uses the machinery for 2,650 hours, and the machinery produces 30,345 units. From the information given, compute the depreciation charge for 2018 under each of the following methods. (Round intermediate calculations to 2 decimal places, e.g. 5.25 and final answers to 0 decimal places, e.g. 45,892.) (a) Straight-line $ (b) Units-of-output (c) Working hours $ (d) Sum-of-the-years'-digits $ (e) Declining-balance (use 20% as the annual rate) $

Answer 1

Answer:- (aj straight line method :- cost - salvage value depreciation for 2016 Useful life $ $374,850 - $17,850 10 = tko $35,700 . (b) Units of output :- 1 x Current year production depreciation for 2018 = Tcost - salvage value I. 1 Estimated productions ! $ 374,850 - $178507 x 30,345 units 285000 = $ 380116 C working hours: depreciation for 2018 = (cost - salvage value Current year hours Eshmated hours < / $ 374850 – $17850 ) x 2690 hours 2 spoo - $37,842

d) Sum of years digits - Sum of years = 1+2+3+4+5+6+ 7-18 + 9 +10 255 ($374,850-$174852) X- i depreciation for 2018 = = $58,418 e) Double-declining balance depreciation rale= 2044 depreciation for 2017 = $ 3746880 x 2016, = $74970 depreciation for 2018 = (374,850 - 74970) * 2016 = $59,976