Question

A machine costing $215,200 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 493,000 units of product during its life. It actually produces the following units: 123,100 in Year 1, 124,200 in Year 2, 120,600 in Year 3, 135,100 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 machine cannot be depreciated below its estimated salvage value.) 33 oints

Answer 1

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.

А G H End of Perido Year Accumulated Depreciation Book Value Answer DDB Depreciation for the Period Beginning of Period Book Depreciation Rate Depreciation Expense Value 215200 50 % 107600 107600 50 % 53800 53800 50 26900 26900 8900 197200 1 2 3 107600 161400 188300 197200 107600 53800 26900 18000 Total Note Depreciation rate = 1/ life *2 *100 = 1/4*2*100 = 50 % 2 B 5 Depreciation expense = begiining book value *50 % 5 For Year 4 depreciation expense will be restricted to $ 8900, as we cannot depreciate asset below salvage value B Accumualted Depreciation = previous accumulated balance + depreciation expense for the period 1 Book value = cost-accumulated depreciation For any help please comment in the comment box Thank You ... Sheet590 Sheet591 Sheet592 Sheet593 Sheet861 Sheet862 Sheet863 Sheet877