Question

2. On January 1, Clayton Cranes purchased a crane for $190,000. Clayton expects the crane to remain useful for ten years (1,200,000 lifts) and to have a residual value of $10,000. The company expects the crane to be used for 160,000 lifts the first year. Read the requirements. a. Compute the first-year depreciation expense on the crane using the straight-line method Begin by selecting the formula to calculate the company's first-year depreciation on the crane using the straight-line method. Then enter the amounts and calculate the depreciation for the first year, (L _ Cost - Residual value Useful life - Straight-line depreciation ( 190000 10000 10 - 18000 b. Compute the first-year depreciation expense on the crane using the units-of-production method. Before calculating the first-year depreciation on the crane using the units-of-production method, calculate the depreciation expense per unit Select the formula, then enter the amounts and calculate the depreciation per unit. (Round depreciation per unit to two decimals, X Cost : Residual value ) Useful life in units - Depreciation per unit 190000 10000 1200000 0.15 Now, select the formula, enter the amounts, and calculate the company's first-year depreciation on the crane using the units of production method. (Round depreciation expense to the nearest whole dollar) Current year usage Depreciation per unit Units-of-production depreciation 160000 0.15 = 24000 C. Compute the first year and second-year depreciation expense on the crane using the double-declining balance method. Begin by selecting the formula to calculate the company's first year and second-year depreciation on the crane using the double-declining-balance method. Then enter the amounts and calculate the depreciation for the first year. Finally, enter the amounts and calculate the for the second year. (Enter "O' for items with a zero value. Do not round the interim calculation. Round depreciation expense to the nearest whole dollar) Cost 0 Requirements 190000 Yr ( Y2 D1520000 0 x Compute the first-year depreciation expense on the crane using the following methods: Double-declining Y = balance depreciation 3B00D 2 x (1 / Useful life) 30400 3x (1/Useful life) 3+ (1 / Useful life) Accumulated depreciation Cast Current year usage Depreciation Depreciation per unit Net book value Residual value Useful life a. Straight-line b. Units-of-production (Round depreciation per unit to two decimals. Round depreciation expense to the nearest whale dollar.) Compute the first-year and second-year depreciation expense on the crane using the following method: c. Double-declining-balance (Round depreciation expense to the nearest whole dollar.) Print Done Choose from any ligt or enter any number in the input fields and then continue to the next question

Answer 1

(Cost (190000 - Residual value) - 10000) / Useful Life I 10 Straight line depreciation $ 18,000 (Cost - Residual value / Useful life in - 10000) 11 1200000 = = Depreciation per Unit $ 0.15 (190000 First year Depreciation Current year usage 160000 * Depreciation per Unit * $ 0.15 Units of Production Depreciation $ 24,000 (Cost - Accumulated Depreciation ) * 2*(1/Useful life) - Double deciling - Depreciation Year 1 Year 2 |( 190000 |( 190000 O ) 38000) 2* (1/10) 2*(1/10) = = $ $ 38,000 30,400 - Note: Depreciation Rate under Double Decling method = 2* 1/useful life = 2* 1/10 = 20%