In recent years, Crane Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
Machine |
Acquired |
Cost |
Salvage |
Useful Life |
Depreciation |
|||||
---|---|---|---|---|---|---|---|---|---|---|
1 |
Jan. 1, 2015 | $126,000 | $16,000 | 10 | Straight-line | |||||
2 |
July 1, 2016 | 79,000 | 11,200 | 5 | Declining-balance | |||||
3 |
Nov. 1, 2016 | 71,900 | 7,900 | 6 | Units-of-activity |
For the declining-balance method, Crane Company uses the
double-declining rate. For the units-of-activity method, total
machine hours are expected to be 32,000. Actual hours of use in the
first 3 years were: 2016, 810; 2017, 6,400; and 2018, 7,900.
(a)
Correct answer iconYour answer is correct.
Compute the amount of accumulated depreciation on each machine at December 31, 2018.
MACHINE 1 |
MACHINE 2 |
MACHINE 3 |
||||
---|---|---|---|---|---|---|
Accumulated Depreciation at December 31 |
$44000 |
$56248 |
$30220 |
(b)
If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2016? In 2017?
2016 |
2017 |
|||
---|---|---|---|---|
Depreciation Expense |
$enter a dollar amount |
$enter a dollar amount |
a) Depreciation expense per unit = (71900-7900/32000) = 2
b) Accumulated depreciation
Machine 1 | Machine 2 | Machine 3 | |
Accumulated depreciation at december 31 | (126000-16000/10*4) = 44000 | (79000*40%+79000*60%*40%+79000*60%*60%*40%*6/12) = 56248 | (810+6400+7900)*2 = 30220 |
c)
2016 | 2017 | |
Depreciation expense | 79000*40%*9/12 = 23700 | 79000*40%*3/12+79000*60%*40%*9/12 = 22120 |
In recent years, Crane Company has purchased three machines. Because of frequent employee turnover in the...
In recent years, Crane Company has purchased three machines.
Because of frequent employee turnover in the accounting department,
a different accountant was in charge of selecting the depreciation
method for each machine, and various methods have been used.
Information concerning the machines is summarized in the table
below.
Machine
Acquired
Cost
Salvage
Value
Useful Life
(in years)
Depreciation
Method
1
Jan. 1, 2015
$130,500
$30,500
10
Straight-line
2
July 1, 2016
88,000
10,100
5
Declining-balance
3
Nov. 1, 2016
76,100...
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In recent years, Sheridan Company has purchased three machines.
Because of frequent employee turnover in the accounting department,
a different accountant was in charge of selecting the depreciation
method for each machine, and various methods have been used.
Information concerning the machines is summarized in the table
below.
Machine
Acquired
Cost
Salvage
Value
Useful Life
(in years)
Depreciation
Method
1
Jan. 1, 2020
$133,000
$45,000
8
Straight-line
2
July 1, 2021
86,500
10,500
5
Declining-balance
3
Nov. 1, 2021
68,200...
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