Asked by Lauren Allysé on Jul 21, 2024
Verified
On January 1,a machine costing $260,000 with a 6-year life and an estimated $5,000 salvage value was purchased.It was also estimated that the machine would produce 500,000 units during its life.The actual units produced during its first year of operation were 110,000.Determine the amount of depreciation expense for the first year under each of the following assumptions:
1.The company uses the straight-line method of depreciation.
2.The company uses the units-of-production method of depreciation.
3.The company uses the double-declining-balance method of depreciation.
Units-Of-Production
A depreciation method that allocates expense based on the actual usage or production levels of an asset.
Double-Declining-Balance
A method of accelerated depreciation that doubles the straight-line depreciation rate, reducing the asset's book value more quickly in the early years of its life.
Straight-Line Method
A method of calculating the depreciation of an asset where the asset's cost is evenly spread over its useful life.
- Calculate and jot down the devaluation expenses for fixed assets using assorted methods.
Verified Answer
2.($260,000 - $5,000)/500,000 = $0.51/unit; 110,000 * $0.51 = $56,100
3.$260,000 * (1/6 * 2)= $86,667
Learning Objectives
- Calculate and jot down the devaluation expenses for fixed assets using assorted methods.
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