Question

# 7,500 #17 DOO # 22,500 45,000 X#20 / 0,05 = Value allocated to equipment = #45000 30,000/16000 Question 2 (12 points) On January 2, 2016, Alpha Company acquired a new machine by signing a 5 year note for 562,000. The estimated service life is eight years and the total units of output to be 200,000. The estimated residual value is $8,000. Using the straight-line method how much is: (Enter only whole dollar values.) 1. the 2017 depreciation expense 2. the accumulated depreciation after the fiscal year 2017 adjusting entry 3. the book value of the machine after the fiscal year 2017 adjusting entry Was beam umucedime/quizzing/userattemptiouz_start_frame auto d27=4151288 prv o -1002855. be

show work please just checking my answers

Answer 1

Answer -

As per given information,

Cost of asset = $62000

Residual value = $8000

Useful life = 8 years

Using the Straight-line method:

1. Answer -

Annual depreciation expense = (Cost of asset - Residual value) / Useful life

Annual depreciation expense = ($62000 - $8000) / 8 years

Annual depreciation expense = $6750

Hence, the Alpha company will depreciate the machine by $6750 every year for 8 years

The 2017 depreciation expense = $6750

2. Answer -

The accumulated depreciation after the fiscal year 2017 adjusting entry = $13500

3. Answer -

The book value of the machine after the fiscal year 2017 adjusting entry = $48500

Calculation:

Here, Under Straight-line method depreciation expense the same amount every accounting period.

So,

Depreciation expense and accumulated depreciation for 8 years.

Year	Book Value (Beginning Year)	Annual Depreciation	Accumulated Depreciation	Book Value (End of Year)
2016	$62000	$6750	$6750	$55250
2017	$55250	$6750	$13500	$48500
2018	$48500	$6750	$20250	$41750
2019	$41750	$6750	$27000	$35000
2020	$35000	$6750	$33750	$28250
2021	$28250	$6750	$40500	$21500
2022	$21500	$6750	$47250	$14750
2023	$14750	$6750	$54000	$8000