Skysong Corp. purchased machinery for $312,900 on May 1, 2025. It is estimated that it will have a useful life of 10 years, salvage value of $15,900, production of 237,600 units, and working hours of 25,000. During 2026, Skysong Corp. uses the machinery for 2,650 hours, and the machinery produces 27,000 units. From the information given, compute the depreciation charge for 2026 under each of the following methods. (Round intermediate calculations to 2 decimal places, e.g. 5.25 and final answers to O decimal places, e.g. 45,892.) (a) Straight-line (b) (c) (d) Units-of-output Working hours Sum-of-the-years'-digits (e) Declining-balance (use 20% as the annual rate) $ $ LA GA
Skysong Corp. purchased machinery for $312,900 on May 1, 2025. It is estimated that it will have a useful life of 10 years, salvage value of $15,900, production of 237,600 units, and working hours of 25,000. During 2026, Skysong Corp. uses the machinery for 2,650 hours, and the machinery produces 27,000 units. From the information given, compute the depreciation charge for 2026 under each of the following methods. (Round intermediate calculations to 2 decimal places, e.g. 5.25 and final answers to O decimal places, e.g. 45,892.) (a) Straight-line (b) (c) (d) Units-of-output Working hours Sum-of-the-years'-digits (e) Declining-balance (use 20% as the annual rate) $ $ LA GA
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Skysong Corp. purchased machinery for $312,900 on May 1, 2025. It is estimated that it will have a useful life of 10 years, salvage
value of $15,900, production of 237,600 units, and working hours of 25,000. During 2026, Skysong Corp. uses the machinery
for 2,650 hours, and the machinery produces 27,000 units.
From the information given, compute the depreciation charge for 2026 under each of the following methods. (Round intermediate
calculations to 2 decimal places, e.g. 5.25 and final answers to O decimal places, e.g. 45,892.)
(a)
(b)
(c)
(d)
Straight-line
Units-of-output
Working hours
Sum-of-the-years'-digits
(e) Declining-balance (use 20% as the annual rate)
$
$
$
GA
GA
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