11-2 The cost of equipment purchased by Marin, Inc., n June 1, 2017, Is $89,890.

Question

11-2 The cost of equipment purchased by Marin, Inc., n June 1, 2017, Is $89,890. It is estimated that the machline will have a $5,050 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,420, and its total production is estimated and produced 55,550 units. During 2018, the machine was operated 5,555 hours and produced 48,480 units. at 530,250 units. During 2017, the machine was operated 6,060 hours e depreciation expense on the machine for the year ending December 31, 2017, and the year ending December 31, 2018, using the following methods. (Round depreciation 2018 (b) Units-of-output (c) Working hours (e) Double-declining-balance (twice the straight-line rate) Question Attempts: 0 of 3 used SAVE FOR LATER /aglist unitid 019 PM 40 3/2/2018 arch

Explanation / Answer

Calculate depreciation :

2017 2018 Straight line (89890-5050/7)*7/12 = 7070 12120 Units of output (89890-5050/530250)*55550 = 8888 (89890-5050/530250)*48480 = 7757 Working hours (89890-5050/42420)*6060 = 12120 (89890-5050/42420)*5555 = 11110 Sum of year digit (89890-5050*7/28*7/12)=12373 (89890-5050*7/28*5/12+89890-5050*6/28*7/12) = 19443 Double decline balance (89890*28.57%*7/12)=14981 (89890*28.57%*5/12+89890*71.43%*28.57%*7/12) = 21402

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