Question

Question 1 Sandhill Limited purchased a machine on account on April 2, 2018, at an invoice price of $332,220. On April 4, it paid $2,170 for delivery of the machine. A one-year, $3,960 insurance policy on the machine was purchased on April 5. On April 18, Sandhill paid $7,840 for installation and testing of the machine. The machine was ready for use on April 30. Sandhill estimates the machine's useful life will be five years or 6,153 units with a residual value of $77,180. Assume the machine produces the following numbers of units each year: 953 units in 2018; 1,483 units in 2019; 1,279 units in 2020; 1,390 units in 2021; and 1,048 units in 2022. Sandhill has a December 31 year end. Your answer is correct. Determine the cost of the machine. Cost of the machine 342230

Answer 1

straight line method :- year 2020 2021 Accumulated depreciation $ 141,360 194,370 247,380 265,050 2022 2023. g) pouble - diminishing balance method. year opening Depreciation Accumulated carrying carring amount ant expense depreciation 2018 $.342230 $.91,261 $91,261. $250,969 2019 250,969 100,388 191,649. 150,581. 2090 150,581 60232 251,881 90,349. 2021 90,349. 13, 169 265,050. $77,180 14.58%) 190,349x40% (90,349 - 79,160) 3 Total cost units of production method - 7 nou of expected units calculation of $342, 230 - $77, 180 $43.08 depreu'ahon per units 6,153 unido luction Yeal Opening Accumulated carrying a expense. depreciation 953. $41,055 41,055 $30, 1175 2019 1483 63,888 100,943 237,287 2020 1279. 55,099. 182, 188 160,042 2021 1390 59,881 219,923 122, 307 1048 265, ofo $77,180 us, 127 Depreciation carrying cant amouna 2018 2022 CAS, 8

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