At the beginning of the year, Soldano.com bought machinery, shelving, and a forklift. The machinery initially cost $32,000 but had to be overhauled (at a cost of $2,480) before it could be installed (at a cost of $1,240) and finally put into use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $510 in each year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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CP9-1(Algo) Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods
[LO 9-2, LO 9-3]
[The following information applies to the questions displayed below.]
At the beginning of the year, Soldano.com bought machinery, shelving, and a forklift. The machinery initially cost $32,000
but had to be overhauled (at a cost of $2,480) before it could be installed (at a cost of $1,240) and finally put into use. The
machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was
actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $510 in each year.
The shelving cost $10,100 and was expected to last 5 years, with a residual value of $760. The forklift cost $18,000 and
was expected to last six years, with a residual value of $2,320.
CP9-1 (Algo) Part 2
2. Compute year 2 units-of-production depreciation expense for the machinery. (Do not round intermediate calculations.)
X Answer is complete but not entirely correct.
$ 6,349
Year 2 units-of-production depreciation expense
Transcribed Image Text:Required information CP9-1(Algo) Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods [LO 9-2, LO 9-3] [The following information applies to the questions displayed below.] At the beginning of the year, Soldano.com bought machinery, shelving, and a forklift. The machinery initially cost $32,000 but had to be overhauled (at a cost of $2,480) before it could be installed (at a cost of $1,240) and finally put into use. The machinery's total life was estimated as 40,000 hours, with an estimated residual value of $1,000. The machinery was actually used 5,000 hours in year 1 and 7,000 hours in year 2. Repair costs were $510 in each year. The shelving cost $10,100 and was expected to last 5 years, with a residual value of $760. The forklift cost $18,000 and was expected to last six years, with a residual value of $2,320. CP9-1 (Algo) Part 2 2. Compute year 2 units-of-production depreciation expense for the machinery. (Do not round intermediate calculations.) X Answer is complete but not entirely correct. $ 6,349 Year 2 units-of-production depreciation expense
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