1) On Hartman Manufacturing acquired a vehicle on January 1, 20X2 for 78,000. The machine is estimated to have 6 years life, with the residual value of 6,000. Hartman Manufacturing is not certain whether to use straight-line or double-declining balance method of depreciation.

Straight-line Double-Declining Balance

Depreciation Expense Book Value Depreciation Expense Book Value

78,000 78,000

Date

01/01/2X02

12/31/2X02

12/31/2X3

12/31/20X4

12/31/20X5

12/31/20X6

12/31/20X7

2) For each of the independant situations below, determine the age of asset in question. All assets were acquired at the begging of the years.

a) The balance in building account is $400,000, while the balance sheet shows the book value of the buildings at $217,600. The notes to the financial statements inidcate that straight-line depriciation is used for all plant assets and the residual value estimated at 5% cost. The estimated life of the buildings is 25 years.

b) The book value of delivery equipment is $51,520. The cost of delivery equipment was $80,500. The company uses the straight-line method of depriciation for delivery equipment and estimates life for 5 years or 50,000 units. So far, 27,000 units have been produced. Residual values is 10% of cost.

3) On January 1, 2009, Elicir Technologies purchased lawn mowers for $60,000. The lawn mowers have estimated life of 8 years or 40,000 hours and an estimated residual value of $4,000. Elicir Technologies must choose the depriciation method that appropriately allocates depreciation over lawn mowers usefull life and would like following items calculated.

1) The Depriciation expense for 2009 and 2010 using the units-of-production depriciation method. The lawn mowers were oparated for 4,000 hours in 2009 and 6,000 hours in 2010.

2) Staright-line depriciation for 2009 and 2010.

3) Accumulated depriciation at December 31, 2010, using straight-line method

4) Accumulated depriciation at December 31, 2010 using the units of production method.

5) Book value of lawn mowers using the staright-line depriciation method and the book value using the units-of- production method of depreciation as of December 31, 2010.