Swanson & Hiller, Inc., purchased a new machine on September 1, 2012 at a cost o
ID: 2421413 • Letter: S
Question
Swanson & Hiller, Inc., purchased a new machine on September 1, 2012 at a cost of $130,000. The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $10,000.
Prepare a complete depreciation schedule, beginning with calendar year 2012, using the straight-line method. (Assume that the half-year convention is used).
Prepare a complete depreciation schedule, beginning with calendar year 2012, using the 200 percent declining-balance method. (Assume that the half-year convention is used). (Round your answers to the nearest dollar amount.)
Prepare a complete depreciation schedule, beginning with calendar year 2012, using the 150 percent declining-balance, switching to straight-line when that maximizes the expense. (Assume that the half-year convention is used). (Round your answers to the nearest dollar amount.
Assume that Swanson & Hiller sells the machine on December 31, 2015, for $29,500 cash. Compute the resulting gain or loss from this sale under each of the depreciation methods used in part a. (Use rounded book values for calculations. Round your final answers to the nearest whole dollar.)
Swanson & Hiller, Inc., purchased a new machine on September 1, 2012 at a cost of $130,000. The machine’s estimated useful life at the time of the purchase was five years, and its residual value was $10,000.
Explanation / Answer
a-1
a-2
a-3
Year Depreciation expense Accumulated depreciation Book value 2012 8,000 12,000 118,000 2013 24,000 36,000 94,000 2014 24,000 60,000 70,000 2015 24,000 84,000 46,000 2016 24,000 108,000 22,000 2017 12,000 120,000 10,000Related Questions
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