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 160,000 $ 3,000 During Year 1, the machine produced 56,000 units, and during Year 2 it produced 58,000 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: Year 1 2 3 4 5 6 7 8 5-Year property, 20.00 32.00 19.20 11.52 11.52 5.76 a. Depreciation expense b. Depreciation expense c. Depreciation expense d. Depreciation expense $ 91,000 $ 5,000 $ 3,000 7-Year property, 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 Year 1 5 years Year 2

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 160,000 $ 3,000 During Year 1, the machine produced 56,000 units, and during Year 2 it produced 58,000 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: Year 1 2 3 4 5 6 7 8 5-Year property, 20.00 32.00 19.20 11.52 11.52 5.76 a. Depreciation expense b. Depreciation expense c. Depreciation expense d. Depreciation expense $ 91,000 $ 5,000 $ 3,000 7-Year property, 14.29 24.49 17.49 12.49 8.93 8.92 8.93 4.46 Year 1 5 years Year 2

Name: bhavesh Banko Incorporated manufactures sporting goods. The following
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Description: bhavesh Banko Incorporated manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1:$ 91,000$5,000$ 3,000Purchase priceDelivery costInstallation chargeEstimated lifeEstimated units.Salvage estimate160

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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