Soft Fabrics Manufacturing purchased new textile machinery at the beginning of 2010 for $150,000. It was expected

Question:

Soft Fabrics Manufacturing purchased new textile machinery at the beginning of 2010 for $150,000. It was expected to last for 10 years and have a salvage value of $10,000. The estimated productive life of the machine was 250,000 units. Yearly production was as follows: in 2010 it produced 25,000 units; in 2011 it produced 28,000 units; in 2012 it produced 18,000 units; in 2013 it produced 29,000 units; in 2014 it produced 23,000 units; in 2015 it produced 15,000 units; in 2016 it produced 40,000 units; in 2017 it produced 25,000 units; in 2018 it produced 21,000 units; and in 2019 it produced 26,000 units.

Requirements

1. Calculate the depreciation for each year using each of these depreciation methods. (Round to the nearest dollar.)

a. Straight-line method

b. Activity method based on units

c. Double-declining balance method

2. For each method, give the amount of accumulated depreciation that would be shown on the balance sheet at the end of each year.

3. Calculate the book value of the textile machinery at the end of each year for each method.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...