Question
Depreciation Methods Lord Company purchased a machine on January 2, 2019, 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, 2019, 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 2019, Lord produced 12,000 units in 2,500 hours. In 2020, Lord produced 15,000 units in 3,000 hours.
Required:
Question Content Area
1 a. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value of the asset at the end of 2019 and 2020 for the Straight-line method.
Beginning Book Value | Depreciation | Ending Book Value | |
2019 | $fill in the blank 1b9c21ff9f95fc3_1 | $fill in the blank 1b9c21ff9f95fc3_2 | $fill in the blank 1b9c21ff9f95fc3_3 |
2020 | $fill in the blank 1b9c21ff9f95fc3_4 | $fill in the blank 1b9c21ff9f95fc3_5 | $fill in the blank 1b9c21ff9f95fc3_6 |
Question Content Area
b. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value of the asset at the end of 2019 and 2020 for the activity method based on hours worked.
Beginning Book Value | Depreciation | Ending Book Value | |
2019 | $fill in the blank 75acb407f07b046_1 | $fill in the blank 75acb407f07b046_2 | $fill in the blank 75acb407f07b046_3 |
2020 | $fill in the blank 75acb407f07b046_4 | $fill in the blank 75acb407f07b046_5 | $fill in the blank 75acb407f07b046_6 |
Question Content Area
c. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value of the asset at the end of 2019 and 2020 for the activity method based on units of output.
Beginning Book Value | Depreciation | Ending Book Value | |
2019 | $fill in the blank ff6205f7103aff8_1 | $fill in the blank ff6205f7103aff8_2 | $fill in the blank ff6205f7103aff8_3 |
2020 | $fill in the blank ff6205f7103aff8_4 | $fill in the blank ff6205f7103aff8_5 | $fill in the blank ff6205f7103aff8_6 |
Question Content Area
d. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value of the asset at the end of 2019 and 2020 for sum-of-the-years'-digits method. Round your answers to the nearest dollar.
Beginning Book Value | Depreciation | Ending Book Value | |
2019 | $fill in the blank 71b5edfee036fbc_1 | $fill in the blank 71b5edfee036fbc_2 | $fill in the blank 71b5edfee036fbc_3 |
2020 | $fill in the blank 71b5edfee036fbc_4 | $fill in the blank 71b5edfee036fbc_5 | $fill in the blank 71b5edfee036fbc_6 |
Question Content Area
e. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value of the asset at the end of 2019 and 2020 for double-declining-balance method. Round your answers to the nearest dollar.
Beginning Book Value | Depreciation | Ending Book Value | |
2019 | $fill in the blank b162deff500aff3_1 | $fill in the blank b162deff500aff3_2 | $fill in the blank b162deff500aff3_3 |
2020 | $fill in the blank b162deff500aff3_4 | $fill in the blank b162deff500aff3_5 | $fill in the blank b162deff500aff3_6 |
Question Content Area
2.
AcceleratedActivityDeceleratedTime-based
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.
AcceleratedActivityDeceleratedTime-based
methods are appropriate when the service life of an asset is affected primarily by the amount the asset is used.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started