Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Depreciation Methods Lord Company purchased a machine on January 2, 2016, for $70,000. The machine had an expected residual value of $10,000, an expected life

Depreciation Methods Lord Company purchased a machine on January 2, 2016, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During 2016, Lord produced 12,000 units in 2,500 hours. In 2017, Lord produced 15,000 units in 3,000 hours.


Required:

1 a. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the Straight-line method. 

b. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the activity method based on hours worked. LORD COMPANY Depreciation Schedule Activity method.

c. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for the activity method based on units of output. LORD COMPANY Depreciation Schedule Activity method.

d. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for sum-of-the-years'-digits methods. Round your answers to the nearest dollar. 

e. Prepare a schedule showing depreciation expense for 2016 and 2017 and the book value of the asset at the end of 2016 and 2017 for double-declining-balance methods. Round your answers to the nearest dollar.

2. methods are appropriate when a company estimates that the service potential of the asset will decline more quickly in the early periods of the asset's useful life. methods are appropriate when the service life of an asset is affected primarily by the amount the asset is used.


Step by Step Solution

3.54 Rating (158 Votes )

There are 3 Steps involved in it

Step: 1

Solution 1a LORD Company Depreciation Schedule SLM Year Asset Cost Depreciable Cost Depreciation Exp... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Reporting and Analysis

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

2nd edition

9781305727557, 1285453824, 9781337116619, 130572755X, 978-1285453828

More Books

Students also viewed these Accounting questions

Question

What attracts you to our graduate program specifically?

Answered: 1 week ago

Question

Identify the most stable compound:

Answered: 1 week ago

Question

Differentiate the retrieval processes of recall and recognition.

Answered: 1 week ago

Question

Identify some common reasons people forget things.

Answered: 1 week ago