FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A machine costing $213,400 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the
following units: 121,500 in Year 1, 122,600 in Year 2, 120,900 in Year 3, 131,000 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.
Note: 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
Double
declining
balance
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
Year 1
121,500
Year 2
122,600
Year 3
120,900
Year 4
131,000
Total
Depreciation
per unit
Depreciation
Expense
$
0
< Straight Line
Double declining balance >
expand button
Transcribed Image Text:A machine costing $213,400 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 121,500 in Year 1, 122,600 in Year 2, 120,900 in Year 3, 131,000 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. Note: 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 Double declining balance 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 Year 1 121,500 Year 2 122,600 Year 3 120,900 Year 4 131,000 Total Depreciation per unit Depreciation Expense $ 0 < Straight Line Double declining balance >
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