2. Cherokee Company acquired a machine on January 1, 2009, that cost $2,700 and

ID: 2434813 • Letter: 2

Question

2. Cherokee Company acquired a machine on January 1, 2009, that cost $2,700 and had an estimated residual value of $200. Complete the following schedule using the three methods of depreciation: A. straight-line, B. units-of-production, C. 150% declining-balance.

Method Estimated Useful Life Depreciation Accumulated
Expense for 2010 Depreciation
12/31/2010
A.SL 5years
B.UOP 10,000 units
1,000 units (2009’s actual)
1,200 units (2010’s actual)
C.DB 5years

SL= Straight Line; UOP= Units of produation; DB= Declining Balance

Explanation / Answer

Method

Estimated Useful Life

Depreciation Expense for 2007

Accumulated Depreciation 12/31/2007

5 years

500

1,000

UOP

10,000 units (total)

1,000 units (2006’s actual)

1,200 units (2007’s actual)

300

550