Chapter 9 Hw Check Your work ezto.mheducation.com/hm.tpx?-0.48488742475377034 15

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Chapter 9 Hw Check Your work ezto.mheducation.com/hm.tpx?-0.48488742475377034 1510018013670 Bookmarks ESCI 111 Quiz 10 F E9-6 Computing Depreciation under Alternative Methods [LO 9-3 Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $22,000. The estimated useful life was five years and the residual value was $2,000. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production for year 1, 2,000 units; year 2, 3,000 units; year 3, 2,000 units; year 4, 2,000 units; and year 5, 1,000 units. Required 1. Complete a depreciation schedule for each of the alternative methods. (Do not round intermediate calculations.) a. Straight-line. Income Statement Depreciation Expense Balance Sheet Accumulated Book Value Depreciation Year Cost At acquisition b. Units-of-production. Income Statement Balance Sheet Depreciation Expense Accumulated Book Value Depreciation Year Cost

Explanation / Answer

DEPRECIATION SCHEDULE :

a) Straight line dep :

2) Unit of production dep :

Dep rate = (22000-2000) /10000 = 2 per unit

3) Double decline dep :

Straight line rate = 100/5=20%

double decline rate = 20*2=40%

Income statement Balance sheet Year Depreciation expenses Cost Accumlated depreciation Book value At acquisition 22000 1 4000 22000 4000 18000 2 4000 22000 8000 14000 3 4000 22000 12000 10000 4 4000 22000 16000 6000 5 4000 22000 20000 2000

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