I ONLY HAVE 20 MINUTES BEFORE THIS QUESTION TIME WILL EXPIRED, WILL SOMEONE PLEA
ID: 2561771 • Letter: I
Question
I ONLY HAVE 20 MINUTES BEFORE THIS QUESTION TIME WILL EXPIRED, WILL SOMEONE PLEASE HELP ME, THANKS. BELOW SEE QUESTION BELOW
Depreciation Methods
On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $100,000, and its estimated useful life was four years or 950,000 cuttings, after which it could be sold for $5,000.
Required
a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):
1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 220,000; 370,000; 300,000; and 60,000.)
1. Straight-Line
2. Double-declining balance
3. Units of Production
b. Assume that the machine was purchased on July 1, 2015. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:
1. Straight-line.
2. Double-declining balance.
1. Straight-Line
2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)
Year Depreciation
Expense 2015 $Answer 2016 Answer 2017 Answer 2018 Answer
Explanation / Answer
ans 1 Straight Line depreciation 23750 (100000-5000)/4 Year Depreciation Expense 2015 23750 2016 23750 2017 23750 2018 23750 2) Double Declining method DDB rate=1/4*200% 0.5 Year Beg bal Dep rate Dep exp Acc dep End bal 2015 100000 0.5 50000 50000 50000 2016 50000 0.5 25000 75000 25000 2017 25000 0.5 12500 87500 12500 2018 12500 0.5 6250 93750 6250 Year Depreciation Expense 2015 50000 2016 25000 2017 12500 2018 6250 3) Unit of production method Rate=(100000-5000)/95000 $1 Year Annual prod Rate per unit Dep exp 2015 220000 $1 $220,000 2016 370000 $1 $370,000 2017 300000 $1 $300,000 2018 60000 $1 $60,000 Year Depreciation Expense 2015 $220,000 2016 370000 2017 300000 2018 60000 ans b ans 1 Straight Line depreciation 23750 (100000-5000)/4 6 months dep for first yaer as purchased on 1 July Year Depreciation Expense 2015 11875 2016 23750 2017 23750 2018 23750 2019 11875 2) Double Declining method DDB rate=1/4*200% 0.5 Year Beg bal Dep rate Dep exp Acc dep End bal 2015 100000 0.25 25000 25000 75000 2016 75000 0.5 37500 62500 37500 2017 37500 0.5 18750 81250 18750 2018 18750 0.5 9375 90625 9375 2019 9375 0.25 2344 92969 7031 Year Depreciation Expense 2015 25000 2016 37500 2017 18750 2018 9375 2019 7031
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