i. TRUE |
If the selling price is more than the carrying value, 17800, the company will record a gain . |
ii. Depreciation under straight-line method will be |
(Cost-Residual Value)/No.of yrs. Of useful life |
ie.(239800-17800)/8= |
27750 |
Under units-of -production |
Depreciable value = 239800-17800= |
222000 |
Depreciation every year= Depreciable Value/Budgeted units* Actual units for the yr. |
Hence , the following depn. Table, |
Year | Depn.under u-o-p | Book Value | |
239800 | |||
2011 | 222000/740000*35000= | 10500 | 229300 |
2012 | 222000/740000*115000= | 34500 | 194800 |
2013 | 222000/740000*116000= | 34800 | 160000 |
2014 | 222000/740000*119000= | 35700 | 124300 |
2015 | 222000/740000*120000= | 36000 | 88300 |
2016 | 222000/740000*117000= | 35100 | 53200 |
2017 | 222000/740000*112000= | 33600 | 19600 |
2018 | 1800 | 17800 | |
(Salvage) |
From the above, it is clear that depn. Amt. every year is different under both the methods. |
so, ii. Is not TRUE |
iii. Depn. Under St.line method is $ 27750 in 2011 |
& depn. Under U-O-P method is $ 10500 in 2011 |
so, the company will report more net income in 2011 under U-o-P method than under St. line method |
So, iii. Is TRUE |
iv.FALSE--Under US GAAP, the company should apply the budgeted activity rate to the actual units of production ,in respective years. |
From the above, |
i& iii are TRUE |
so, we can select choices |
A & C |
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work Year 2011 2012 2013 2014 2015...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Year 2011 2012 2013 2014 2015...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Year 2011 2012 2013 2014 2015...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Year 2011 2012 2013 2014 2015...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Budgeted Bolts Actual Bolts Year Budgeted...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740.000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Budgeted Bolts Actual Bolts Year Budgeted...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Budgeted Bolts Actual Bolts Year Budgeted...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Year 2011 2012 2013 2014 2015...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Year 2011 2012 2013 2014 2015...
On September 1, 2011, a company purchased a weaving machine for $239,800. The machine has an estimated useful life of 8 years and an estimated residual value of $17,800. Additionally, it is estimated that the machine would produce 740,000 bolts of woven fabric over its useful life. The company ended up selling the machine in 2018 after 1 month of use. The following budgeted and actual activity levels were provided to support your work: Year 2011 2012 2013 2014 2015...