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Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units. Instructions From the information given, compute the depreciation charge for 2021 under each of the following methods. (Round to the nearest dollar.) a.   Straight-line. b.   Units-of-output. c.   Working hours. d.   Sum-of-the-years’-digits. e.   Declining-balance (use 20% as the annual rate).

Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units. Instructions From the information given, compute the depreciation charge for 2021 under each of the following methods. (Round to the nearest dollar.) a.   Straight-line. b.   Units-of-output. c.   Working hours. d.   Sum-of-the-years’-digits. e.   Declining-balance (use 20% as the annual rate).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units.

Instructions

From the information given, compute the depreciation charge for 2021 under each of the following methods. (Round to the nearest dollar.)

a.   Straight-line.

b.   Units-of-output.

c.   Working hours.

d.   Sum-of-the-years’-digits.

e.   Declining-balance (use 20% as the annual rate).

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