Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gruman Company purchased a machine for $ 1 9 8 , 0 0 0 on January 2 , 2 0 1 6 . It made

Gruman Company purchased a machine for $
198
,
000
on January
2
,
2016
.
It made the following estimates:
Service life
5
years or
10
,
000
hours
Production
180
,
000
units
Residual value $
18
,
000
In
2016
,
Gruman uses the machine for
1
,
700
hours and produces
50
,
000
units. In
2017
,
Gruman uses the machine for
1
,
400
hours and produces
30
,
000
units. If required, round your final answers to the nearest dollar.
Required:
Compute the depreciation for
2016
and
2017
under each of the following methods:
Straight
-
line method
2016
$ fill in the blank
1
2017
$ fill in the blank
2
Sum
-
of
-
the
-
years'
-
digits method
2016
$ fill in the blank
3
2017
$ fill in the blank
4
Double
-
declining
-
balance method
2016
$ fill in the blank
5
2017
$ fill in the blank
6
Activity method based on hours worked
2016
$ fill in the blank
7
2017
$ fill in the blank
8
Activity method based on units of output
2016
$ fill in the blank
9
2017
$ fill in the blank
10
For each method, what is the book value of the machine at the end of
2016
?
At the end of
2017
?
Straight
-
line method
2016
$ fill in the blank
11
2017
$ fill in the blank
12
Sum
-
of
-
the
-
years'
-
digits method
2016
$ fill in the blank
13
2017
$ fill in the blank
14
Double
-
declining
-
balance method
2016
$ fill in the blank
15
2017
$ fill in the blank
16
Activity method based on hours worked
2016
$ fill in the blank
17
2017
$ fill in the blank
18
Activity method based on units of output
2016
$ fill in the blank
19
2017
$ fill in the blank
20
If Gruman used a service life of
8
years or
15
,
000
hours and a residual value of $
9
,
000
,
what would be the effect on the following under the straight
-
line, sum
-
of
-
the
-
years'
-
digits, and double
-
declining
-
balance depreciation methods?
Depreciation expense
Straight
-
line method
2016
$ fill in the blank
21
2017
$ fill in the blank
22
Sum
-
of
-
the
-
years'
-
digits method
2016
$ fill in the blank
23
2017
$ fill in the blank
24
Double
-
declining
-
balance method
2016
$ fill in the blank
25
2017
$ fill in the blank
26
Book value
Straight
-
line method
2016
$ fill in the blank
27
2017
$ fill in the blank
28
Sum
-
of
-
the
-
years'
-
digits method
2016
$ fill in the blank
29
2017
$ fill in the blank
30
Double
-
declining
-
balance method
2016
$ fill in the blank
31
2017
$ fill in the blank
32

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Survey of Accounting

Authors: Edmonds, old, Mcnair, Tsay

2nd edition

9780077392659, 978-0-07-73417, 77392655, 0-07-734177-5, 73379557, 978-0073379555

More Books

Students also viewed these Accounting questions