In
recent years, Farr Company has purchased three machines. Because of
frequent employee turnover in the accounting department, a different
accountant was in charge of selecting the depreciation method for each
machine, and various methods have been used. Information concerning the
machines is summarized in the table below.
Machine
Acquired
Cost
Salvage
Value
Useful
Life
(in years)
Depreciation
Method
1
Jan. 1, 2012
$122,000
$35,600
8
Straight-line
2
July 1, 2013
82,000
11,800
5
Declining-balance
3
Nov. 1, 2013
101,500
8,500
7
Units-of-activity
For the declining-balance method, Farr Company uses the double-declining
rate. For the units-of-activity method, total machine hours are expected
to be 31,000. Actual hours of use in the first 3 years were:
2013, 800; 2014, 6,180; and 2015, 7,780.
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Compute the amount of accumulated depreciation on each
machine at December 31, 2015.
MACHINE
1
MACHINE
2
MACHINE
3
Accumulated
Depreciation at December 31
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If machine 2 was purchased on April 1 instead of July 1,
what would be the depreciation expense for this machine in 2013? In 2014?
2013
2014
Depreciation Expense
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In
recent years, Farr Company has purchased three machines. Because of
frequent employee turnover in the accounting department, a different
accountant was in charge of selecting the depreciation method for each
machine, and various methods have been used. Information concerning the
machines is summarized in the table below.MachineAcquiredCostSalvage
ValueUseful
Life
(in years)Depreciation
Method1Jan. 1, 2012$122,000$35,6008Straight-line2July 1, 201382,00011,8005Declining-balance3Nov. 1, 2013101,5008,5007Units-of-activity
For the declining-balance method, Farr Company uses the double-declining
rate. For the units-of-activity method, total machine hours are expected
to be 31,000. Actual hours of use in the first 3 years were:
2013, 800; 2014, 6,180; and 2015, 7,780..png” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>.png” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>.png” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>Compute the amount of accumulated depreciation on each
machine at December 31, 2015.MACHINE
1MACHINE
2MACHINE
3Accumulated
Depreciation at December 31$.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>$.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>$.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>
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what would be the depreciation expense for this machine in 2013? In 2014?20132014Depreciation Expense$.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>$.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>
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