Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000 In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answers to the nearest dollar. Required: 1. Compute the depreciation for 2016 and 2017 under each of the following methods: a. Straight-line method 2016 $ 40,000 V 2017 $ b. Sum-of-the-years'-digits method 193,333 X 2016 $ 2017 $ c. Double-declining-balance method 2016 $ 2017 $ HArtivitv method hased on hours worked Previous Next

Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates: Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000 In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answers to the nearest dollar. Required: 1. Compute the depreciation for 2016 and 2017 under each of the following methods: a. Straight-line method 2016 $ 40,000 V 2017 $ b. Sum-of-the-years'-digits method 193,333 X 2016 $ 2017 $ c. Double-declining-balance method 2016 $ 2017 $ HArtivitv method hased on hours worked Previous Next

Name: ain.do?invoker=&takeAssignmentSessionLocator=&inprogress3DfalseеВookS
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: ain.do?invoker=&takeAssignmentSessionLocator=&inprogress3DfalseеВookShow Me HowDepreciation MethodsGruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates:Service life5 years or 10,000 hoursProduction200,0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

! Required information [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $261,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows: 7 Year 1 2 Year 1 2 3 4 5 6 Hours Used 2,800 1,400 1,500 2,500 3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.) 2,300 1,500 UNIVERSITY CAR WASH Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Expense Accumulated Depreciation Book Value
Heer Don't upload any image please
Your company is considering the purchase of a new 623K Wheel Tractor-Scraper. Use the following information to calculate the hourly owning costs, hourly operating costs, and total owning and operating costs. - Delivered price (with tires): $420,000 - Cost of Tires: $30,000 and their life is determined by the average operation in zone B. - Salvage value is zero - the equipment is new and it is anticipated to be used for 5 years, until end of its service life. - Anticipated operating hours per year: 2,000 hrs/yr - Simple interest rate for purchase loan: 12% - Annual cost of Insurance: $5,500 (See optional method) - Property tax rate: 2% - Fuel use will be average value in medium range - Cost of fuel: $3.10 per gallon - Hourly Maintenance Cost: $5.00 per hour - Repair cost: $11.00 per hour - Operator cost (with fringes): $75 per hour - No undercarriage or special wear items costs…
ABC Company purchased a new machine on July 1, 2021. It was expected to produce 200,000 units of product over its estimated useful life of eight years. Total cost of the machine was P700,000, and residual value was estimated to be P70,000. Actual units produced by the machine in 2021 and 2022 are shown below. 2021 .................16,000 units 2022...................30,000 units ABC Company reports on a calendar-year basis and uses the units-of-production method of depreciation. The amount of depreciation expense for this machine in 2022 would be
6. On March 10, 2018, Hardwood Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost $30 per set) with terms of n/60, f.o.b. shipping point. Hardwood allows Barr to return any unused tool sets within 60 days of purchase. Hardwood estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2018, Barr returned six tool sets and received a credit to its account. Required: Prepare journal entries for Hardwood to record (1) The sale on March 10, 2018 (2) The return on March 25, 2018 (3) Any adjusting entries required on March 31, 2018 (when Hardwood prepares financial statements). Hardwood believes the original estimate of returns is correct. Solution
Speed, Inc., is a shipping company. On 1/1/20, the company purchases a new commercial sleeper truck for $790,000 cash. The expected residual value of the truck is $60,000 and the expected useful life is 10 years. The company estimates that the truck will be used to drive 1,000,000 miles over its useful life (120,000 miles in 2020; 90,000 miles in 2021 & all subsquent years). For the units-of-activity method, round the depreciaiton-per-unit to two decimal places before using it. You PART A - STRAIGHT LINE DEPRECIATION Income StatementDepreciation Expense Year Ended 12/31/2020fill in the blank 1 Year Ended 12/31/2021 fill in the blank 2 Balance SheetAccumulated Depreciation As of 12/31/2020fill in the blank 3 As of 12/31/2021fill in the blank 4 PART B - UNITS-OF-ACTIVITY DEPRECIATION Income StatementDepreciation Expense Year Ended 12/31/2020fill in the blank 5 Year Ended 12/31/2021 fill in the blank 6 Balance SheetAccumulated Depreciation As of 12/31/2020fill in the…
"age purchased a laboratory machine of 60000 $ on January 1, 2013. The machine is expected to have a salvage value of 6000 $ at the end of its 6 year useful life. During the useful life, the machine is expected to be used for 7600 hours. The machine was used as under: Year Hour used 2013 1 500 1 200 1 600 1 000 2014 2015 2016 2017 900 2018 1 400 Required: Prepare schedule of depi - Straight Line Method dream iation based on the following methods - Method Sum of Year - Double Declining Method
Required information [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $222,000 including installation. The company estimates that the equipment will have a residual value of $21,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows: Year 1 Hours Used 2,700 2 1,500 3 1,600 4 2,400 5 2,200 6 1,600 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
8. On January 1, 2019, Sapphire Manufacturing Company purchased a machine for $40,000,000. The company expects to use the machine for 24,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $40,000. The schedule of usage of the machine is below. Year Usage 1 4,500 2 6,000 3 5,200 4 4,300 5 2,000 6 2,000 Prepare the depreciation schedule using the units-of-production method of depreciation.
A machine that produces cellphone components is purchased on January 1, 2024, for $171,000. It is expected to have a useful life of four years and a residual value of $12,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end. (a) Calculate the amount of depreciation to be charged each year, using each of the following methods: i. Straight-line method Straight-line method depreciation Senter a dollar amount per year per year ii. Units-of-production method (Round depreciation per unit to 3 decimal places, e.g. 15.257 and depreciation expense to 0 decimal places, e.g. 125.) Units-of-production method depreciation Senter a dollar amount per unit rounded to 3 decimal places per unit Year Depreciation Expense 2024 Senter a dollar amount 2025 Senter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount iii.…
HELP ME
A Machine was purchased on 1st January 2004 at a cost, of $50,000 and the cost of installation $8,000 his expected that its total working life will be 100,000 hours. The scrap value may be Rs 3,000. During the year 2004, the machine worked for 1,200 hours and in 2005 for 1,350 hours. Calculate the book value after 2005. Show your solutions.