Question
Company A, Company B and Company C had purchased the same piece of machinery 2 years ago at the beginning of 2018. The machinery was
Company A, Company B and Company C had purchased the same piece of machinery 2 years ago at the beginning of 2018. The machinery was originally purchased for $108,000 and had a residual value of $4,000. At the time of purchase the estimated useful life of the asset was 4 years or the equivalent useful life in units-of-production equal to 26,000 units. At the beginning of 2020, it was determined that the total useful life of the asset was 6 years rather than 4 years originally expected or the equivalent total units-of-production of 30,800 units. In addition, to the extended useful life of the machinery, the revised residual value is estimated at $2,100. The actual number of units produced in the first two years was 5,400 units per year. The actual production for 2020 was 7,600 units. Each of the companies uses a different method of depreciation with Company A using the straight-line method of depreciation, Company B uses the units-of-production method with a per unit depreciation charge rounded to the nearest cent and Company C uses the double diminishing-balance method. Calculate the original depreciation expense amounts prior to the revision in estimates for each of Company A, Company B and Company C, for 2018 and 2019. Depreciation Expense for 2018 Depreciation Expense for 2019 Company A $ $ Company B $ $ Company C $ $ Question Part Score--/6 Calculate the revised depreciation expense amount for 2020 for each of Company A, Company B and Company C. (Round depreciation per unit to 2 decimal places, e.g. 1.25 and final answers to 0 decimal places, e.g. 125.) Revised annual depreciation for 2020 Company A $ Company B $ Company C $
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