ment CALCULATOR FULL SCREEN PRINTER VERSION 4BAC NEXT Exercise 11-4 Windsor Corp
ID: 2570304 • Letter: M
Question
ment CALCULATOR FULL SCREEN PRINTER VERSION 4BAC NEXT Exercise 11-4 Windsor Corp. purchased machinery for $393,750 on May 1, 2017. It is estimated that it will have a useful life of 10 years, salvage value of $18,750, production of 300,000 units, and working hours of 25,000. During 2018, Windsor Corp. uses the machinery for 2,650 hours, and the machinery produces 31,875 units. From the information given, compute the depreciation charge for 2018u intermediate calculations to ) decimal place, en ananswers to o decial pacesy e nder each of the following methods. (Round a,892) (a) Straight-line (b) Units-of-output (c) Working hours (d) Sum-of-the-years'-digits (e) Declining-balance (use 20% as the annual rate) $ Click if you would like to Show Work for this question: Open Show Work SUBMIT ANSWER SAVE FOR LATER Question Attempts: Unlimited Version 4.24.2.4 11.00 AM 1/13/2 ohn Wiley &Sons; Inc. All Rights Reserved. A Division of 20hnExplanation / Answer
The depreciation for 2018 using each method is as under:
(a) Straight line depreciation = (Cost - Salvage value)/ Useful life
= ($393750-$18750) / 10 = $37500
(b) Units of output depreciation = ($393750-$18750) * 31875/300000 = $39843.75
(c) Working hours depreciation = ($393740-$18750) * 2650/25000 = $39750
(d) Sum of years digit depreciation = ($393750-$18750) * 2/(10+9+8+7+6+5+4+3+2+1)
= 375000 * 2 / 55 = $13636.36
(e) Declining depreciation methode depreciation = 2*Straight line depreciation rate * (cost - salvage value)
= 2 *10% * ($393750-18750)
= $75000
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