In recent years, Flakeboard Company purchased three machines. Various amortization methods were selected. Information concerning the machines is summarized below: Machine Acquired Cost Jan. 1, 1999 $96,000 Jan. 1, 2000 60,000 Nov. 1, 2001 66,000 1 2 3 Residual Useful Life in Amortization Method Value $6,000 10,000 6,000 Years 10 8 6 Straight-line Declining-balance Units-of-activity For the declining-balance method, the company uses double the straight-line rate. For the units-of- activity method, total machine hours are expected to be 24,000. Actual hours of use in the first two years were 1,000 in 2001 and 4,500 in 2002. Instructions a) Calculate the amount of accumulated amortization on each machine at December 31, 2002. Round your answers to the nearest dollar. b) If Machine 2 has been purchased on April 1 instead of January 1, what would the amortization expense be for the machine in 1) 2000, 2) 2001, and 3) 2002?

In recent years, Flakeboard Company purchased three machines. Various amortization methods were selected. Information concerning the machines is summarized below: Machine Acquired Cost Jan. 1, 1999 $96,000 Jan. 1, 2000 60,000 Nov. 1, 2001 66,000 1 2 3 Residual Useful Life in Amortization Method Value $6,000 10,000 6,000 Years 10 8 6 Straight-line Declining-balance Units-of-activity For the declining-balance method, the company uses double the straight-line rate. For the units-of- activity method, total machine hours are expected to be 24,000. Actual hours of use in the first two years were 1,000 in 2001 and 4,500 in 2002. Instructions a) Calculate the amount of accumulated amortization on each machine at December 31, 2002. Round your answers to the nearest dollar. b) If Machine 2 has been purchased on April 1 instead of January 1, what would the amortization expense be for the machine in 1) 2000, 2) 2001, and 3) 2002?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 3MCQ: When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash...

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