CSecure https//newconnect.mheducatiol.comm Check my work mode: This shows what i
ID: 2552102 • Letter: C
Question
CSecure https//newconnect.mheducatiol.comm Check my work mode: This shows what is correct or incorrect for the work you have c A machine costng $210,000 with a tour-yoar ife and an estrmated S18,000 salvage value is Installed In Luther Company's foctory on January 1 The factory manager estmates the machine will produce 480,000 units of product during its ife. It actually produces the following unts 122,700 in 1ct year, 122,400 in 2nd year, 120.500 in 3rd year, 124,400 in 4th year The total number of units produced by 10 was not predicted. (The machine must not be depreciated below is ectimated salvage value Required Compute depreciation for each year (and total deprectason of all years combined) for the machine under each depreciation method. Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar) 3 Answer is not complete. Complete this question by entering your answers in the tabs below, Production esch year (and total depreci ation of all years combined) for the machine under each Units of upExplanation / Answer
Cost: $ 210,000 Salvage Value: $ 18,000 Depreciable amount: Cost -Salvage value = 210,000 -18000 = $192000 Annual Depreciation: Depreciable amount/ Life of asset = 192,000 / 4 years =48,000 Depreciation per unit of production: Depreciable amount/ Total Units $ 192,000 /480,000 units = 0.40 Per unit Rate of Depreciation SLM = 25% Rate of Deperciation under DDM = 25*2=50% Depreeciation Under SLM: Year Annual Depreciation expense under SLM 1 48000 2 48000 3 48000 4 48000 Depreciation under Units of Production method: Year Depreciable Depreciation Depreciation Units Per unit Expense 1 122700 0.4 49,080 2 122400 0.4 48,960 3 120500 0.4 48,200 4 114400 0.4 45,760 192,000 Note; As in Year-4, total units of production exceeds estimate, therefore, the balance of estimate shall be considered for depreciation. Depreciation Under DDM: Year Book value In Beginning Depreciation @50% Accumulated Depreciation Book Value at the end 1 210,000 105000 105000 105,000 2 105000 52500 157500 52500 3 52500 26250 183750 26250 4 26250 8250 192000 18000 Note: In year-4, the depreciation shall not be such so that accumulated depreciation exceed $192,000. Therefore, the depreciation for Year-4 is a balancing figure.