Jim Company bought a machine for $34,800 with an estimated life of 3 years. The

Question

Jim Company bought a machine for $34,800 with an estimated life of 3 years. The residual value of the machine is $10,160. This machine is expected to produce 123,200 units. In year 1, it produced 20,100 units, and in year 2, 38,200 units.

Assuming the units-of-production method, calculate the first 2 years

Jim Company bought a machine for $34,800 with an estimated life of 3 years. The residual value of the machine is $10,160. This machine is expected to produce 123,200 units. In year 1, it produced 20,100 units, and in year 2, 38,200 units.

Explanation / Answer

year 1 depriciation = (20100/123200)*(34800-10160) = 4020

year2 depriciation = (38200/123200)*(34800-10160) = 7640

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