Gruman Company purchased a machine for $220,000 on January 2, 2019. It made the following estimates: Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000 In 2019, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2020, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answers to the nearest c Required: 1. Compute the depreciation for 2019 and 2020 under each of the following methods: a. Straight-line method 40,000 2019 $ 2020 $ 40,000 b. Sum-of-the-years'-digits method 2019 $ 2020 $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Depreciation Methods
Gruman Company purchased a machine for $220,000 on January 2, 2019. It made the following estimates:
Service life
5 years or 10,000 hours
Production
200,000 units
Residual value
$20,000
In 2019, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2020, 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 2019 and 2020 under each of the following methods:
a. Straight-line method
2019 $
40,000
2020 $
40,000
b. Sum-of-the-years'-digits method
2019 $
2020 $
Doubla-daclining-halance method
Transcribed Image Text:Depreciation Methods Gruman Company purchased a machine for $220,000 on January 2, 2019. It made the following estimates: Service life 5 years or 10,000 hours Production 200,000 units Residual value $20,000 In 2019, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2020, 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 2019 and 2020 under each of the following methods: a. Straight-line method 2019 $ 40,000 2020 $ 40,000 b. Sum-of-the-years'-digits method 2019 $ 2020 $ Doubla-daclining-halance method
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Depletions and Amortizations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education