Question
*** I need step by step instructions in the below questions*** Banko Inc. manufactures sporting goods. AThe following information applies to a machine purchased on
*** I need step by step instructions in the below questions***
Banko Inc. manufactures sporting goods. AThe following information applies to a machine purchased on January 1, 2016: |
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Purchase price | $ | 71,500 |
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Delivery cost | $ | 5,000 |
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Installation charge | $ | 1,000 |
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Estimated life |
| 5 | years |
Estimated units |
| 143,000 |
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Salvage estimate | $ | 6,000 |
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During 2016, the machine produced 39,000 units and during 2017, it produced 41,000 units. |
Required: |
a. | Determine the amount of depreciation expense for 2016 and 2017 using straight-line method. |
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b | Determine the amount of depreciation expense for 2016 and 2017 using double-declining-balance method. |
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c. | Determine the amount of depreciation expense for 2016 and 2017 using units of production method. |
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d. | Determine the amount of depreciation expense for 2016 and 2017 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.) |
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| MACRS table: |
Year | 5-Year property,% | 7-Year property,% | ||||
1 |
| 20.00 |
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| 14.29 |
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2 |
| 32.00 |
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| 24.49 |
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3 |
| 19.20 |
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| 17.49 |
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4 |
| 11.52 |
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| 12.49 |
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5 |
| 11.52 |
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| 8.93 |
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6 |
| 5.76 |
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| 8.92 |
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7 |
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| 8.93 |
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8 |
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| 4.46 |
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Determine the amount of depreciation expense for 2016 and 2017 ?
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