Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: Purchase price Delivery cost Installation charge Estimated life Estimated units Salvage estimate $ 70,500 $ 6,000 $ 1,000 5 years 149,000 $ 3,000 During Year 1, the machine produced 45,000 units and during Year 2, it produced 47,000 units. Required Determine the amount of depreciation expense for Year 1 and Year 2 using each of the following methods: Year 1 Year 2 a. Straight-line b. Double-declining-balance c. Units of production

Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: Purchase price Delivery cost Installation charge Estimated life Estimated units Salvage estimate $ 70,500 $ 6,000 $ 1,000 5 years 149,000 $ 3,000 During Year 1, the machine produced 45,000 units and during Year 2, it produced 47,000 units. Required Determine the amount of depreciation expense for Year 1 and Year 2 using each of the following methods: Year 1 Year 2 a. Straight-line b. Double-declining-balance c. Units of production

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.9E: Working Backward: Depreciation Polk Corp. purchased new store fixtures for $55,000 on January 31,...

See similar textbooks

Similar questions

Working Backward: Depreciation Polk Corp. purchased new store fixtures for $55,000 on January 31, 2014. Polk depreciates assets using the straight-line method and estimated a salvage value for the machine of $5,000. On its December 31, 2016, balance sheet, Polk reported the following: Required What is the yearly amount of depreciation expense for the store fixtures? What is the estimated useful life in years for the store fixtures? Explain your answer.
Banko Incorporated manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: Purchase price Delivery cost Installation charge Estimated life Estimated units $ 54,800 $ 6,000 $ 4,000 5 years 152,000 $ 4,000 Salvage estimate During Year 1, the machine produced 48,000 units, and during Year 2 it produced 50,000 units. Required: a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. Note: Round your answers to the nearest dollar amount. MACRS table: 5-Year Year property, 7-Year property, 12345678 20.00 14.29 32.00 24.49 19.20 17.49 11.52 12.49…
Banko Incorporated manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: Purchase price $ 70,500 Delivery cost $ 6,000 Installation charge $ 1,000 Estimated life 5 years Estimated units 149,000 Salvage estimate $ 3,000 During Year 1, the machine produced 45,000 units, and during Year 2 it produced 47,000 units. Required: Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. Determine the amount of depreciation expense for Year 1 and Year 2 using MACR
Banko Incorporated manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1. Purchase price Delivery cost Installation charge Estimated life Estimated units Salvage estimate During Year 1, the machine produced 46,000 units, and during Year 2 it produced 48,000 units. Required MACRS table: 5-Year Year property, & 20.00 a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.) 1 2 3 4 $58,000 $5,000 $3,000 32.00 19.20 11.52 11.52 5.76 7-Year property, 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 5…
Banko Incorporated manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1. Purchase price $85,800 Delivery cost $5,000 Installation charge $2,000 Estimated life 5 years Estimated units 148,000 Salvage estimate $4,000 During Year 1, the machine produced 44,000 units, and during Year 2 it produced 46,000 units. Required Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.) MACRS table: Year 5-Year property,% 7-Year property,% 1 20.00 14.29 2 32.00 24.49 3…
Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] On April 1, Cyclone's Co. purchases a trencher for $302,000. The machine is expected to last five years and have a salvage value of $51,000. Exercise 8-11 Straight-line, partial-year depreciation LO C2 Compute depreciation expense at December 31 for the first and second year assuming the company uses the straight-line method. Choose Numerator: Choose Denominator: Annual Depreciation Annual depreciation Depreciation Expense Year Annual Depreciation Fraction of Year First year Second year
Use exact info in question. Sabel Company purchased assembly equipment for $594,000 on January 1, Year 1. Sabel's financial condition immediately prior to the purchase is shown in Required B. The equipment is expected to have a useful life of 220,000 machine hours and a salvage value of $22,000. Actual machine-hour use was as follows. Year 1 58,000 Year 2 73,000 Year 3 44,000 Year 4 38,000 Year 5 12,000 Required Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation. Assume that Sabel earns $232,000 of cash revenue during Year 1. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in a horizontal statements model. Assume that Sabel sold the equipment at the end of the fifth year for $22,800. Record the general journal entry for the sale.
Comparing Theee Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $233,400. The equipment was expected to have a useful ife of three years, or 6,300 operating hours, and a residual value of $19,200. The equipment was used for 2,520 hours during Year 1, 1,953 hours in Year 2, and 1,827 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Vear 3, by (a) the straight-ine method, (b) the unite-of- activity method, and (e) the double-decining-balance method, Also determine the total depreciation expense for the three years by each method. Note: For all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Straight-Line Nethod Units-of-Activity Method Double-Declining-Balance Method Year Year 1 Year 2 Year 3 Total 2. What method yields the highest depreciation expense for Year 17 3. What method ylelds the most depreciation over the three-year…
The price of a railroad engine purchased by the Kenneth family for their business was $2,250. Prepare adepreciation schedule using the MACRS (Modified Accelerated Cost Recovery System) method and calculatethe accumulated depreciation at the end of year 3. (Round all amounts to the nearest cent) $393.53 $432.00 $258.12 $518.96
Sabel Co. purchased assembly equipment for $608,000 on January 1, Year 1. The equipment is expected to have a useful life of 320,000 miles and a salvage value of $32,000. Actual mileage was as follows: Year 1 88,000 Year 2 84,000 Year 3 79,000 Year 4 48,000 Year 5 22,000 Required a. Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation. b. Assume that Sabel earns $242,000 of cash revenue during Year 1. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in the following financial statements model. c. Assume that Sabel sold the equipment at the end of the fifth year for $33,800. Calculate the amount of gain or loss on the sale.
Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] On April 1, Cyclone Co. purchases a trencher for $280,000. The machine is expected to last five years and have a salvage value of $40,000. Exercise 8-12 Double-declining-balance, partial-year depreciation LO C2 Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the double- declining-balance method. (Enter all amounts as positive values.) Depreciation for the Period End of Period. Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Annual Period Partial Year Book Value Depreciation Yoor 1
eBook Show Me How Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2 and Year 3 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 fill in the blank 4 fill in the blank 5 fill in the blank 6…