On January 2, 2021, Archer Company, a skateboard manufacturer, installed a computerized machine in its factory at a cost of $158,000. The machine's useful life was estimated at four years or a total of 187,500 units with a $23,000 trade-in value. Archer Company's year-end is December 31. Calculate depreciation for each year of the machine's estimated useful life under each of the following methods: (Do not round intermediate calculations.) a. Straight-line b. Double-declining-balance c. Units-of-production, assuming actual units produced were: Year Units 2021 2022 2023 2024 38,700 41,750 53,000 60,000 Year Straight-Line Double-Declining-Balance Units-of-Production 2021 2022 2023 2024 Total
On January 2, 2021, Archer Company, a skateboard manufacturer, installed a computerized machine in its factory at a cost of $158,000. The machine's useful life was estimated at four years or a total of 187,500 units with a $23,000 trade-in value. Archer Company's year-end is December 31. Calculate depreciation for each year of the machine's estimated useful life under each of the following methods: (Do not round intermediate calculations.) a. Straight-line b. Double-declining-balance c. Units-of-production, assuming actual units produced were: Year Units 2021 2022 2023 2024 38,700 41,750 53,000 60,000 Year Straight-Line Double-Declining-Balance Units-of-Production 2021 2022 2023 2024 Total
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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