On January 1, 2024, Nash Company, a small machine-tool manufacturer, acquired for $1,190,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value was estimated to be $72,200. Nash estimates that the new equipment can produce 12,000 machine tools in its first year. It estimates that production will decline by 1,140 units per year over the remaining useful life of the equipment. The following depreciation methods may be used: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years'-digits, and (4) units-of-output. For tax purposes, the class life is 7 years. Use the MACRS tables for computing depreciation. (a1) Compute accumulated depreciation under the following methods: (1) straight-line, (2) double-declining-balance, (3) sum-of-the- years-digits, and (4) units-of-output for the 3-year period ending December 31, 2026. Ignore present value, income tax, and deferred income tax considerations. (Round cost per unit to 2 decimal places, e.g. 25.12 and final answers to 0 decimal places, e.g. 5,125.)

On January 1, 2024, Nash Company, a small machine-tool manufacturer, acquired for $1,190,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value was estimated to be $72,200. Nash estimates that the new equipment can produce 12,000 machine tools in its first year. It estimates that production will decline by 1,140 units per year over the remaining useful life of the equipment. The following depreciation methods may be used: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years'-digits, and (4) units-of-output. For tax purposes, the class life is 7 years. Use the MACRS tables for computing depreciation. (a1) Compute accumulated depreciation under the following methods: (1) straight-line, (2) double-declining-balance, (3) sum-of-the- years-digits, and (4) units-of-output for the 3-year period ending December 31, 2026. Ignore present value, income tax, and deferred income tax considerations. (Round cost per unit to 2 decimal places, e.g. 25.12 and final answers to 0 decimal places, e.g. 5,125.)

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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