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- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.Windsor, Inc. purchased a new machine on October 1, 2022, at a cost of $120,000. The company estimated that the machine will have a salvage value of $13,000. The machine is expected to be used for 10,000 working hours during its 5-year life.
- Flounder Company purchased a new machine on October 1, 2022, at a cost of $110,000. The company estimated that the machine will have a salvage value of $10,000. The machine is expected to be used for 10,000 working hours during its 4-year life.Rufiel Corporation purchased a new machine on JULY 1, 2020. The machine cost $40,000 and had an estimated salvage value of $4,000. (NOTE THE PURCHASE DATE IS JULY 1, 2020) Inverness estimated that the machine will have a useful life of 6 years or 100,000 units. Inverness uses the machine in its manufacturing operations and produces 20,000 units in Year 1, 33,000 units in Year 2 and 19,000 units in Year 3, 17,000 units in Year 4 and 6,000 units in Year 5 and 5,000 units in Year 6. a) Compute depreciation expense for Years 1 through 3 using the following methods: straight line units-of-production double declining balanceRufiel Corporation purchased a new machine on JULY 1, 2020. The machine cost $40,000 and had an estimated salvage value of $4,000. (NOTE THE PURCHASE DATE IS JULY 1, 2020) Inverness estimated that the machine will have a useful life of 6 years or 100,000 units. Inverness uses the machine in its manufacturing operations and produces 20,000 units in Year 1, 33,000 units in Year 2 and 19,000 units in Year 3, 17,000 units in Year 4 and 6,000 units in Year 5 and 5,000 units in Year 6. b) Indicate what is the balance of Accumulated Depreciation at the end of each year using the Units-of-Production Method
- The cost of equipment purchased by Oriole, Inc., on June 1, 2025, is $90,300. It is estimated that the machine will have a $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 600,000 units. During 2025, the machine was operated 7,260 hours and produced 66,550 units. During 2026, the machine was operated 6,655 hours and produced 58,000 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892.) a. Straight-line b. Units-of-output C. Working hours d. Sum-of-the-years'-digits $ $ $ $ e. Double-declining-balance $ 2025 $ $ $ $ +A $ 2026The cost of equipment purchased by Oriole, Inc., on June 1, 2025, is $90,300. It is estimated that the machine will have a $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 600,000 units. During 2025, the machine was operated 7,260 hours and produced 66,550 units. During 2026, the machine was operated 6,655 hours and produced 58,000 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892) a. b. Straight-line Units-of-output C. Working hours d. Sum-of-the-years-digits $ $ to e. Double-declining-balance $ tA 2025 7000 9310 14520 21000 25826 $ $ $ GA $ 2026 12000 8120 13310 14850 18440Grove Company acquired a production machine on January 1, 2022, at a cost of $540,000. The machine is expected to have a four- year useful life, with a salvage value of $104,000. The machine is capable of producing 74,000 units of product in its lifetime. Actual production was as follows: 16,280 units in 2022; 23,680 units in 2023; 20,720 units in 2024; 13,320 units in 2025. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset's life, using three alternative depreciation methods (items a to c): Required: Identify the depreciation method used for each of the following comparative balance sheet presentations (items a to c). If a declining- balance method is used, be sure to indicate the percentage (150% or 200%). (Hint: Read the balance sheet from right to left to determine how much has been depreciated each year. Remember that December 31, 2022, is the end of the first year.) a. b. C. Production…
