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.)
1. Straight line.
Choose Numerator: / Choose Denominator: = Annual Depreciation Expense Cost minus Salvage / Estimated Useful Life (years) = Depreciation Expense $143,000 / 10 = $14,300 Depreciation Expense 2016 2017 $14,300
2. Sum-of-the-years' digits.
Sum-of-the-years' digits depreciation Depreciable Base x Rate per Year = Depreciation Expense 2016 $143,000 x 10/55 = $26,000 2017 $143,000 x 9/55 = $23,400
3. Double-declining balance.
Depreciation for the Period End of Period Annual Period Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 2016 % 2017 %
4. One hundred fifty percent declining balance.
Depreciation for the Period End of Period Annual Period Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 2016 % 2017 %
5. Units of production (units produced in 2016, 46,000; unitsproduced in 2017, 41,000). (Round "Depreciation per unitrate" answers to 2 decimal places.)
electformula for Units of Production Depreciation: Calculate2016 depreciation expense: Depreciation per unit rate Unitsproduced in 2016 46,000 Depreciation in 2016 Calculate2017 depreciation expense: Depreciation per unit rate Unitsproduced in 2017 41,000 Depreciation in 2017
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.)
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| 5. | Units of production (units produced in 2016, 46,000; unitsproduced in 2017, 41,000). (Round "Depreciation per unitrate" answers to 2 decimal places.)
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Related questions
On October 1, 2016, the Allegheny Corporation purchasedmachinery for $314,000. The estimated service life of the machineryis 10 years and the estimated residual value is $6,000. The machineis expected to produce 550,000 units during its life. Required:Calculate depreciation for 2016 and 2017 using each of thefollowing methods. Partial-year depreciation is calculated based onthe number of months the asset is in service.
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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.
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B. Calculate depreciation expense for 2018 and 2019 using sum-of-the-yearsâ-digits method.
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C. Calculate depreciation expense for 2018 and 2019 using double-declining balance method.
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On March 31, 2016, the Herzog Company purchased a factorycomplete with machinery and equipment. The allocation of the totalpurchase price of $920,000 to the various types of assets alongwith estimated useful lives and residual values are as follows: |
| Asset | Cost | Estimated Residual Value | Estimated Useful Life in Years | |||||
| Land | $ | 140,000 | N/A | N/A | ||||
| Building | 420,000 | none | 25 | |||||
| Machinery | 220,000 | 10% of cost | 6 | |||||
| Equipment | 140,000 | $ | 14,000 | 6 | ||||
| Total | $ | 920,000 | ||||||
On June 29, 2017, machineryincluded in the March 31, 2016, purchase that cost $92,000 was soldfor $72,000. Herzog uses the straight-line depreciation method forbuildings and machinery and the sum-of-the-years'-digits method forequipment. Partial-year depreciation is calculated based on thenumber of months an asset is in service. |
| Required: | |
| 1. | Compute depreciation expense on the building, machinery, andequipment for 2016. (Do not round intermediatecalculations.) |
| 2. | Prepare the journal entries to record the depreciation on themachinery sold on June 29, 2017, and the sale of machinery.(Do not round intermediate calculations. If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.) | |
| 3. | Compute depreciation expense on the building, remainingmachinery, and equipment for 2017. (Do not roundintermediate calculations.) | |
