Monte’s Coffee Company purchased packaging equipment on January 5, 2014, for $90
ID: 2450538 • Letter: M
Question
Monte’s Coffee Company purchased packaging equipment on January 5, 2014, for $90,000. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,000. The equipment was used for 8,900 hours during 2014, 7,100 hours in 2015, and 4,000 hours in 2016.
1. Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, and 2016 by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.)
Question not attempted.
Score: 0/45
Depreciation Expense
Year
Straight-Line Method
Units-of-Output Method
Double-Declining-Balance Method
2014
2015
2016
Total
Required: 1. Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, and 2016 by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.)1. Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, and 2016 by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.)
Question not attempted.
Score: 0/45
Depreciation Expense
Year
Straight-Line Method
Units-of-Output Method
Double-Declining-Balance Method
2014
$??? $??? $???2015
$??? $??? $???2016
$??? $??? $???Total
$??? $??? $???Explanation / Answer
Working is as under
Depreciable Amount = Cost of Equipement - Salvage value
= 90,000 - 6,000
= 84,000
1. Staight line method = Depreciable amount / useful life
= 84,000 / 3
= 28,000 each year
2. unit of output method = no. of hr of operation during year x depreciable amount / total operating hours
3. Double Dicling method
here we calculate rate of depreciation & then apply to opening book value
Depreciation rate = (1/useful life) x 200%
= 1/3 x 200% = 33.33% x 2 = 67.67%
Year Staight Line Unit of Output Double Decling 2014 28,000 37,380 60,000 2015 28,000 29,820 20,000 2016 28,000 16,800 6,667 Total 84,000 84,000 86,667