Alexa Plastics Company purchased a new stamping machine at the beginning of the year at a cost
Question:
Alexa Plastics Company purchased a new stamping machine at the beginning of the year at a cost of \(\$ 125,000\). The estimated residual value was \(\$ 15,000\). Assume that the estimated useful life was five years and the estimated productive life of the machine was 250,000 units. Actual annual production was as follows:
Required:
1. Complete a separate depreciation schedule for each of the alternative methods. Round your computations to the nearest dollar.
a. Straight-line
b. Units-of-production
c. Double-declining-balance
2. Assuming that the machine was used directly in the production of one of the products that the company manufactures and sells, what factors might management consider in selecting a preferable depreciation method in conformity with the matching process?
Step by Step Answer:
Financial Accounting
ISBN: 9780070001497
4th Canadian Edition
Authors: Patricia A. Libby, Daniel Short, George Kanaan, Maureen Libby Gowing, Robert Libby