Asked by Tarja Singh on Jun 13, 2024
Verified
A new machine costing $1,800,000 cash and estimated to have a $60,000 salvage value was purchased on January 1.The machine is expected to produce 600,000 units of product during its 8-year useful life.Calculate the depreciation expense in the first year under the following independent situations:
1.The company uses the units-of-production method and the machine produces 70,000 units of product during its first year.
2.The company uses the double-declining-balance method.
3.The company uses the straight-line method.
Units-Of-Production
A method of depreciation that distributes an asset's cost across its lifespan according to the quantity of units manufactured.
Double-Declining-Balance
An accelerated method of depreciation that doubles the rate at which an asset's book value decreases, resulting in higher depreciation expenses in the early years.
Straight-Line Method
A depreciation technique that allocates an equal amount of depreciation expense for a tangible asset over each year of its useful life.
- Quantify and register the depreciation outlay for tangible assets utilizing various strategies.
Verified Answer
2.$1,800,000 * 25% = $450,000
3.($1,800,000 - $60,000)/8 years = $217,500
Learning Objectives
- Quantify and register the depreciation outlay for tangible assets utilizing various strategies.
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