Solution 1:
Depreciable cost of equipment = Cost - Salvage value = $215,200 - $18,000 = $197,200
Luther Company. - Straight line method | |||||
Year | Asset Cost | Depreciable Cost | Depreciation Expense for the year (1/4 of depreciable cost) | Accumulated Depreciation | Ending Book Value |
Purchase Date | $215,200.00 | ||||
1 | $197,200.00 | $49,300.00 | $49,300.00 | $165,900.00 | |
2 | $197,200.00 | $49,300.00 | $98,600.00 | $116,600.00 | |
3 | $197,200.00 | $49,300.00 | $147,900.00 | $67,300.00 | |
4 | $197,200.00 | $49,300.00 | $197,200.00 | $18,000.00 | |
Total | $197,200.00 |
Solution 2:
Depreciation per unit produced = Depreciable cost / Estimated production during entire life = $197,200 / 493000 = $0.40 per unit
Luther Company - Unit of Production method | ||||||
Date | Asset Cost | Depreciation per unit | Nos of units produced | Depreciation Expense for the year | Accumulated Depreciation | Ending Book Value |
Purchase Date | $215,200.00 | |||||
1 | $0.40 | 121800 | $48,720.00 | $48,720.00 | $166,480.00 | |
2 | $0.40 | 123200 | $49,280.00 | $98,000.00 | $117,200.00 | |
3 | $0.40 | 120600 | $48,240.00 | $146,240.00 | $68,960.00 | |
4 | $0.40 | $50,960.00 | $197,200.00 | $18,000.00 | ||
Total | $197,200.00 |
Solution 3:
Depreciation rate - SLM = 1/4 = 25%
Depreciation rate - DDB = 25%*2 = 50%
Depreciation Schedule - Double Declining Balance Method | ||||||
Date | Asset Cost | Book Value | Depreciation Rate (25%*2) | Depreciation Expense for the year | Accumulated Depreciation | Ending Book Value |
Purchase Date | $215,200 | |||||
1 | $215,200 | 50% | $107,600 | $107,600 | $107,600 | |
2 | $107,600 | 50% | $53,800 | $161,400 | $53,800 | |
3 | $53,800 | 50% | $26,900 | $188,300 | $26,900 | |
4 | $26,900 | $8,900 | $197,200 | $18,000 | ||
Total | $197,200 |
Problem 8-2A Depreciation methods LO P1 A machine costing $215,200 with a four-year life and an...
Problem 10-2A Depreciation methods LO P1 A machine costing $211,200 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 488,000 units of product during its life. It actually produces the following units: 122,200 in 1st year, 122,700 in 2nd year, 121,200 in 3rd year, 131,900 in 4th year. The total number of units produced by the end of year 4 exceeds the...
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Problem 8-2A Depreciation methods LO P1 A machine costing $213,600 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 489,000 units of product during its life. It actually produces the following units: 122,800 in Year 1, 122,700 in Year 2, 120,000 in Year 3, 133,500 in Year 4. The total number of units produced by the end of Year 4 exceeds the...
Problem 10-2A Depreciation methods LO P1 A machine costing $214,200 with a four-year life and an estimated $19.000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 488,000 units of product during its life. It actually produces the following units: 122,700 in 1st year, 122,600 in 2nd year, 121,500 in 3rd year, 131,200 in 4th year. The total number of units produced by the end of year 4 exceeds the...
help I'm stuck! Problem 10-2A Depreciation methods LO P1 A machine costing $208,800 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 477,000 units of product during its life. It actually produces the following units: 122,400 in 1st year, 124,100 in 2nd year, 120,400 in 3rd year, 120,100 in 4th year. The total number of units produced by the end of year...
Problem 8-2A Depreciation methods LO P1 A machine costing $216,000 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 495,000 units of product during its life. It actually produces the following units: 123,000 in 1st year, 123,100 in 2nd year, 120,400 in 3rd year, 138,500 in 4th year. The total number of units produced by the end of year 4 exceeds the...
A machine costing $210.400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 121,700 in Year 1, 122,600 in Year 2, 120,600 in Year 3, 131,100 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted.(The...
A machine costing $213,200 with a four-year life and an estimated $16,000 salvage value is Installed In Luther Company's factory on January 1. The factory manager estimates the machine will produce 493,000 units of product during its life. It actually produces the following units: 122,000 In Year 1, 124,300 In Year 2, 121,100 In Year 3, 135,600 In Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted....