Depreciation Methods
The Gruman Company purchased a machine for $ 220,000 on January2, 2013. It made the following estimates:
Service life 5 years or 10,000 hours Production 200,000 units Residual value $ 20,000
In 2013, Gruman uses the machine for 1,800 hours and produces44,000 units. In 2014, Gruman uses the machine for 1,500 hours andproduces 35,000 units. If required, round your final answer to thenearest dollar.
Required:
Depreciation expense
Compute the depreciation for 2013 and 2014 under each of thefollowing methods:
2013 $ 2014 $
2013 $ 2014 $
Straight-line method
2013 $ 2014 $
Sum-of-the-years'-digits method
2013 $ 2014 $
Double-declining-balance method
2013 $ 2014 $
Activity method based on hours worked
Activity method based on units of output
For each method, what is the book value of the machine at theend of 2013? At the end of 2014?
2013 $ 2014 $
2013 $ 2014 $
Straight-line method
2013 $ 2014 $
Sum-of-the-years'-digits method
2013 $ 2014 $
Double-declining-balance method
2013 $ 2014 $
Activity method based on hours worked
Activity method based on units of output
If Gruman used a service life of 8 years or 15,000 hours and aresidual value of $10,000, what would be the effect on thefollowing under the straight-line, sum-of-the-years'-digits, anddouble-declining-balance depreciation methods?Straight-linemethod
2013 $ 2014 $
Sum-of-the-years'-digits method
2013 $ 2014 $
Double-declining-balance method
2013 $ 2014 $
Book value
Straight-line method
2013 $ 2014 $
Sum-of-the-years'-digits method
2013 $ 2014 $
Double-declining-balance method
2013 $ 2014 $
Depreciation Methods
The Gruman Company purchased a machine for $ 220,000 on January2, 2013. It made the following estimates:
Service life | 5 years or 10,000 hours |
Production | 200,000 units |
Residual value | $ 20,000 |
In 2013, Gruman uses the machine for 1,800 hours and produces44,000 units. In 2014, Gruman uses the machine for 1,500 hours andproduces 35,000 units. If required, round your final answer to thenearest dollar.
Required:
Depreciation expense
Compute the depreciation for 2013 and 2014 under each of thefollowing methods:
2013 | $ |
2014 | $ |
2013 | $ |
2014 | $ |
Straight-line method
2013 | $ |
2014 | $ |
Sum-of-the-years'-digits method
2013 | $ |
2014 | $ |
Double-declining-balance method
2013 | $ |
2014 | $ |
Activity method based on hours worked
Activity method based on units of output
For each method, what is the book value of the machine at theend of 2013? At the end of 2014?
2013 | $ |
2014 | $ |
2013 | $ |
2014 | $ |
Straight-line method
2013 | $ |
2014 | $ |
Sum-of-the-years'-digits method
2013 | $ |
2014 | $ |
Double-declining-balance method
2013 | $ |
2014 | $ |
Activity method based on hours worked
Activity method based on units of output
If Gruman used a service life of 8 years or 15,000 hours and aresidual value of $10,000, what would be the effect on thefollowing under the straight-line, sum-of-the-years'-digits, anddouble-declining-balance depreciation methods?Straight-linemethod
2013 | $ |
2014 | $ |
Sum-of-the-years'-digits method
2013 | $ |
2014 | $ |
Double-declining-balance method
2013 | $ |
2014 | $ |
Book value
Straight-line method
2013 | $ |
2014 | $ |
Sum-of-the-years'-digits method
2013 | $ |
2014 | $ |
Double-declining-balance method
2013 | $ |
2014 | $ |