Description
Problem 9-7A (Part Level Submission)
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.
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)
Compute the amount of accumulated depreciation on each machine at December 31, 2015.
MACHINE 1
Accumulated Depreciation at December
31
MACHINE 2
$
MACHINE 3
$
$
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