A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,600 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be
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.)
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- A company purchased machinery for $ 200,000 on 1st January . It has an estimated useful life of 10 years and an estimated salvage value of $ 20,000 . The firm sells the asset at the salvage value at the end of the 10th year . The machine has an expected production of 15000 units during its useful life . Now the production pattern is as follows : Year Production 1-3 2000 units per year 4-7 1500 units per year 8-10 1000 units per year Answer the following questions using the Units of Production Method . a . What is the BV at year - 3 ? b . What is the BV at year - 10 ? c . What is the cumulative depreciation through year - 8 ?arrow_forwardA 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…arrow_forwardA machine costing $207,800 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 482,000 units of product during its life. It actually produces the following units: 123,400 in Year 1, 122,900 in Year 2, 120,800 in Year 3, 124,900 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. Straight Units of Double Line Producti... declining Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. 1 2 Complete this…arrow_forward
- On January 1, Celebrity Allures Inc. bought a new popcorn popper for one of their movie theaters. The popper cost $8,000. The expected life is 8 years with a salvage value of $200. The popper is expected to produce 50,000 buckets of popcorn over its life. In the first year, the popper produced 9,000 buckets of popcorn. In the second year, the popper produced 12,000 buckets of popcorn. What is the second year depreciation expense on the popcorn popper assuming double declining balance depreciation? $3,500 $1,500 $975 $2,000arrow_forward(2). A machine costing $207,800 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 477,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 122,900 in Year 2, 121,100 in Year 3, 120,100 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.arrow_forwardA machine costing $212,800 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 124,000 in Year 2, 120,200 in Year 3, 129,900 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…arrow_forward
- [The following information applies to the questions displayed below.] Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $83,600. The machine's useful life is estimated at 20 years, or 398,000 units of product, with a $4,000 salvage value. During its second year, the machine produces 33,800 units of product.arrow_forwardYour answerarrow_forwardxact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows: Year 1 390,000 Year 2 410,000 Year 3 420,000 Year 4 300,000 Total 1,520,000 The printer was sold at the end of Year 4 for $1,650. Requireda. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.arrow_forward
- A machine costing $211,400 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 481,000 units of product during its life. It actually produces the following units: 123,200 in Year 1, 123,600 in Year 2, 121,400 in Year 3, 122,800 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 Year Year 1 Year 2 Year 3 Year 4 Total Compute depreciation for each year (and total depreciation…arrow_forwardA machine costing $217,200 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 493,000 units of product during its life. It actually produces the following units: 122,200 in Year 1, 124,100 in Year 2, 121,500 in Year 3, 135,200 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.) A machine costing $217,200 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce…arrow_forwardAssume Plain Ice Cream Company, Incorporated, in Ithaca, NY, bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $24,000. The estimated useful life was four years, and the residual value was $2,580. Assume that the estimated productive life of the machine was 10,200 hours. Actual annual usage was 4,080 hours in Year 1; 3,060 hours in Year 2; 2,040 hours in Year 3; and 1,020 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Complete a depreciation schedule using the units-of-production method. Note: Use two decimal places for the per unit output factor. Do not round intermediate calculations. Year Depreciation Expense At acquisition 1 2 3 4 Accumulated Depreciation Net…arrow_forward
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