FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A machine costing $212,600 with a four-year life and an estimated $15,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 494,000 units of product during its life. It actually produces the
following units: 122,800 in Year 1, 123,100 in Year 2, 120,800 in Year 3, 137,300 in Year 4. The total number of units produced by the end
of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its
estimated salvage value.
Required:
Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
(Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)
Complete this question by entering your answers in the tabs below.
Straight Line
Units of
Production
DDB
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of
production.
Units of Production
Year
Units
Depreciable
Units
Depreciation
Depreciation
per unit
Expense
Year 1
122,800
122,800 $
0.40
Year 2
123,100
123,100 $
0.40
Year 3
120,800
120,800 $
0.40
Year 4
137,300
127,300 $
0.40
Total
$
494,000
$
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Transcribed Image Text:A machine costing $212,600 with a four-year life and an estimated $15,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 494,000 units of product during its life. It actually produces the following units: 122,800 in Year 1, 123,100 in Year 2, 120,800 in Year 3, 137,300 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Straight Line Units of Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Units of Production Year Units Depreciable Units Depreciation Depreciation per unit Expense Year 1 122,800 122,800 $ 0.40 Year 2 123,100 123,100 $ 0.40 Year 3 120,800 120,800 $ 0.40 Year 4 137,300 127,300 $ 0.40 Total $ 494,000 $
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