Problem

Identify depreciation methods used Moyle Co. acquired a machine on January 1, 2010, at a c...

Identify depreciation methods used Moyle Co. acquired a machine on January 1, 2010, at a cost of $320,000. The machine is expected to have a five-year useful life, with a salvage value of $20,000. The machine is capable of producing 300,000 units of product in its lifetime. Actual production was as follows: 60,000 units in 2010; 40,000 units in 2011; 80,000 units in 2012; 50,000 units in 2013; and 70,000 units in 2014.

Required:

Identify the depreciation method that would result in each of the following annual credit amount patterns to accumulated depreciation. If a declining-balance method is used, indicate the percentage (150% or 200%). (Hint: What do the amounts shown for each year represent?)

a.

Accumulated Depreciation

 

 

60,000 12/31/10

 

 

40,000 12/31/11

 

 

80,000 12/31/12

 

 

50,000 12/31/13

 

 

70,000 12/31/14


b.

Accumulated Depreciation

 

 

96,000 12/31/10

 

 

67,200 12/31/11

 

 

47,020 12/31/12

 

 

32,928 12/31/13

 

 

23,050 12/31/14


c.

Accumulated Depreciation

 

 

128,000 12/31/10

 

 

76,800 12/31/11

 

 

46,080 12/31/12

 

 

27,648 12/31/13

 

 

16,588 12/31/14


d.

Accumulated Depreciation

 

 

60,000 12/31/10

 

 

60,000 12/31/11

 

 

60,000 12/31/12

 

 

60,000 12/31/13

 

 

60,000 12/31/14

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