ezto.mheducation.com/hm.tpx Econnect ACCOUNTING ial apter 9 Homework Question 8
ID: 2546870 • Letter: E
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ezto.mheducation.com/hm.tpx Econnect ACCOUNTING ial apter 9 Homework Question 8 (of 10) value 1.00 points A machine that cost $494,000 has an estimated residual value of $19,000 and an estimated useful life of 19,000 machine hours. The company uses units-of-production depreciation and ran the machine 4,000 hours in year 1, 6,000 hours in year 2, and 6,000 hours in year 3 Calculate its book value at the end of year 3. (Do not round intermediate calculations.) Value References eBook & Resources Worksheet DOLLExplanation / Answer
BOOK VALUE AT THE END OF YEAR 3 = $ 94,000
Year
Opening Balance
Depreciation
Book Value
1
$ 494000
$ 100000
$ 394000
2
$ 394000
$ 150000
$ 244000
3
$ 244000
$ 150000
$ 94000
4
$ 94000
Depreciation = [(Cost of Asset - Redidual Value) / Estimated Total Production] x Actual Production
Depreciation Year 1 = [ ($494000 - $ 19000) / 19000 Miles ] x 4000 Miles
= $ 1,00,000
Depreciation Year 2 = [ ($494000 - $ 19000) / 19000 Miles ] x 6000 Miles
= $ 1,50,000
Depreciation Year 3 = [ ($494000 - $ 19000) / 19000 Miles ] x 6000 Miles
= $ 1,50,000
Year
Opening Balance
Depreciation
Book Value
1
$ 494000
$ 100000
$ 394000
2
$ 394000
$ 150000
$ 244000
3
$ 244000
$ 150000
$ 94000
4
$ 94000
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