Ivanhoe Limited purchased a machine on account on April 1, 2021, at an invoice price of $378,380. On April 2, it paid $2,130 for delivery of the machine. A one-year, $3,710 insurance policy on the machine was purchased on April 5. On April 19, Ivanhoe paid $7.920 for installation and testing of the machine. The machine was ready for use on April 30. Ivanhoe estimates the machine's useful life will be five years or 6,054 units with a residual value of $72,200. Assume the machine produces the following numbers of units each year: 893 units in 2021: 1,547 units in 2022: 1,308 units in 2023; 1,201 units in 2024; and 1,105 units in 2025. Ivanhoe has a December 31 par end. (a) Your answer is correct. Determine the cost of the machine.
Ivanhoe Limited purchased a machine on account on April 1, 2021, at an invoice price of $378,380. On April 2, it paid $2,130 for delivery of the machine. A one-year, $3,710 insurance policy on the machine was purchased on April 5. On April 19, Ivanhoe paid $7.920 for installation and testing of the machine. The machine was ready for use on April 30. Ivanhoe estimates the machine's useful life will be five years or 6,054 units with a residual value of $72,200. Assume the machine produces the following numbers of units each year: 893 units in 2021: 1,547 units in 2022: 1,308 units in 2023; 1,201 units in 2024; and 1,105 units in 2025. Ivanhoe has a December 31 par end. (a) Your answer is correct. Determine the cost of the machine.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please don't give image based answer..thanku
Transcribed Image Text:Ivanhoe Limited purchased a machine on account on April 1, 2021, at an invoice price of $378,380. On April 2, it paid $2,130 for
delivery of the machine. A one-year, $3,710 insurance policy on the machine was purchased on April 5. On April 19, Ivanhoe paid
$7,920 for installation and testing of the machine. The machine was ready for use on April 30.
Ivanhoe estimates the machine's useful life will be five years or 6,054 units with a residual value of $72,200. Assume the machine
produces the following numbers of units each year: 893 units in 2021: 1,547 units in 2022; 1,308 units in 2023; 1,201 units in 2024;
and 1,105 units in 2025. Ivanhoe has a December 31 par end.
(a)
Your answer is correct.
Determine the cost of the machine.
Transcribed Image Text:Calculate the annual depreciation and total depreciation over the asset's life using (Round the depreciation cost per unit to 2 decimal
places Round answers to 0 decimal places, eg 5,275)
(1) Straight-line method
2
Depreciable Amount
(2) Double-diminishing-balance method
Opening Carrying Amount
$
(3) Units-of-production method
Units-of-production
893
1547
1308
1201
Depreciation Expense
$
Depreciation Expense
Depreciation Expense
Accumulated Depreciation
$
Carrying Amount
Accumulated Depreciation
S
Accumulated Depreciation
$
Carrying Amount
72200
Carrying Amount
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