Change in Estimate
Assume that Bloomer Company purchased a new machine on January 1, 2017, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2019, Bloomer discovered that the machine would not be useful beyond December 31, 2022, and estimated its value at that time to be $2,000.
Required:
1. Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2017 to 2022. If necessary, round any depreciation calculations to the nearest dollar.
Year Depreciation
Expense Accumulated
Depreciation
Book Value 2017 $ $ $ 2018 2019 2020 2021 2022
Change in Estimate
Assume that Bloomer Company purchased a new machine on January 1, 2017, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1, 2019, Bloomer discovered that the machine would not be useful beyond December 31, 2022, and estimated its value at that time to be $2,000.
Required:
1. Calculate the depreciation expense, accumulated depreciation, and book value of the asset for each year 2017 to 2022. If necessary, round any depreciation calculations to the nearest dollar.
| Year | Depreciation Expense | Accumulated Depreciation | Book Value |
| 2017 | $ | $ | $ |
| 2018 | |||
| 2019 | |||
| 2020 | |||
| 2021 | |||
| 2022 |
Related questions
2.
On March 31, 2018, Canseco Plumbing Fixtures purchased equipment for $32,000. Residual value at the end of an estimated four-year service life is expected to be $8,000. The company expects the machine to operate for 20,000 hours.
a. Calculate depreciation expense for 2018 and 2019 using straight line method.
b. Calculate depreciation expense for 2018 and 2019 using sum-of-the-yearsâ-digits method.
c. Calculate depreciation expense for 2018 and 2019 using double-declining balance method.
A.
Calculate depreciation expense for 2018 and 2019 using straight line method.
| ||||||||||||||||||||||||||||||||||||||||||
B. Calculate depreciation expense for 2018 and 2019 using sum-of-the-yearsâ-digits method.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. Calculate depreciation expense for 2018 and 2019 using double-declining balance method.
| |||||||||||||||||||||||||||||
On January 1, 2016, the AlleghenyCorporation purchased machinery for $156,000. The estimated servicelife of the machinery is 10 years and the estimated residual valueis $13,000. The machine is expected to produce 220,000 units duringits life.
| Required: |
| Calculate depreciation for 2016 and 2017 using each of thefollowing methods. (Do not round intermediatecalculations.)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5. | Units of production (units produced in 2016, 46,000; unitsproduced in 2017, 41,000). (Round "Depreciation per unitrate" answers to 2 decimal places.)
| |||||||||||||||||||
