Description
In recent years, Farr Company has purchased three machines. Because of frequent employee
turnover in the accounting department, a different accountant was in charge of selecting the
depreciation method for each machine, and various methods have been used. Information
concerning the machines is summarized in the table below.
Machine
1
2
3
Acquired
Jan. 1, 2012
July 1, 2013
Nov. 1, 2013
Cost
$120,000
85,000
88,540
Salvage
Value
$12,000
10,400
7,940
Useful Life
(in years)
10
5
6
Depreciation
Method
Straight-line
Declining-balance
Units-of-activity
For the declining-balance method, Farr Company uses the double-declining rate. For the units-ofactivity method, total machine hours are expected to be 31,000. Actual hours of use in the first 3
years were: 2013, 880; 2014, 4,970; and 2015, 6,550.
(a)
Your answer is correct.
Compute the amount of accumulated depreciation on each machine at December 31, 2015.
MACHINE 1
Accumulated Depreciation at
December 31
$
MACHINE 2
$
43,200
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question:
MACHINE 3
$
60,520
32,240
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Attempts: 1 of 3 used
(b)
If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense
for this machine in 2013? In 2014?
2013
Depreciation
Expense
2014
$
$
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