Question
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
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 2,000 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.
1: Compute the depreciation for 2016 and 2017 under each of the following methods. 2: For each method, what is the book value of the machine at the end of 2016? At the end of 2017? 3: 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?
I"ve already done question part 1 and two, I only provided them as background information. I just need question 3.
Depreciation expense
- Straight-line method
2016 $ 2017 $ - Sum-of-the-years'-digits method
2016 $ 2017 $ - Double-declining-balance method
2016 $ 2017 $
Book value
- Straight-line method
2016 $ 2017 $ - Sum-of-the-years'-digits method
2016 $ 2017 $ - Double-declining-balance method
2016 $ 2017 $
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