Homework Answers
a.
| Year | Hours of machine use in year | Depreciation expense Straight line method | Depreciation expense Units of production method | Depreciation expense double declining balance |
| 1 | 5000 | 10200 | 9629.63 | 20800 |
| 2 | 14000 | 10200 | 26962.96 | 12480 |
| 3 | 4000 | 10200 | 7703.70 | 7488 |
Computations:
Straight line method = (52000-1000)/5 = 10200
expense Units of production method :
Year 1: 52000 *5000 /27000 = 9629.63
Year 2: 52000 *14000 /27000 = 26962.96
Year 3: 52000 *4000 /27000 = 7703.70
Double declining rate = 1/5 * 2= 40%
Year 1 : 52000*40% = 20800
Year 2: (52000 - 20800) * 40% = 12480
Year 3: (52000 - 20800 - 12480) *40% = 7488
b. Depreciated value of the asset = 52000 - 9629.63 - 26962.96 - 7703.70 = 7703.70
Gain on sale = 21000 - 7703.7 = 13296.30
c.
| Account Titles | Debit | Credit |
| Cash | 21000 | |
| Machinery | 7703.70 | |
| Gain on sale of machinery | 13296.30 |
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