Question
In recent years, Cullumber Corporation has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of
In recent years, Cullumber Corporation has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
Machine | Acquired | Cost | Residual Value | Useful Life (in years) | Depreciation Method | |||||
1 | Jan. 1, 2018 | $89,900 | $12,000 | 5 | Straight-line | |||||
2 | July 1, 2019 | 92,500 | 9,350 | 5 | Diminishing-balance | |||||
3 | Nov. 1, 2019 | 65,960 | 6,510 | 6 | Units-of-production |
For the diminishing-balance method, Cullumber Corporation uses double the straight-line rate. For the units-of-production method, total machine hours are expected to be 23,780. Actual hours of use in the first 3 years were: 2019, 380; 2020, 4,230; and 2021, 4,830.
Prepare separate depreciation schedules for each machine. Prepare the schedule for all years, information permitting. (Round depreciation per unit to 2 decimal places, e.g. 5.20 and answers to the nearest whole dollar, e.g. 5,275. Do not leave any answer field blank. Enter O for amounts.) Machine 1: Straight-line depreciation End of Year Depreciable Amount Calculation Depreciation Rate # of months Depreciation Expense Accumulated Depreciation Carrying Amount Year 2018 $ TA 2019 2020 2021 2022 Machine 2: Diminishing-balance depreciation Machine 2: Diminishing-balance depreciation End of Year Carrying Amount Beg. of Year Calculation Depreciation Rate # of months Depreciation Expense Accumulated Depreciation Carrying Amount Year 2019 $ 2020 2021 2022 2023 Machine 3: Units-of-production depreciation Units-of- Production Calculation Depreciation Cost/Unit Depreciation Expense End of Year Accumulated Depreciation Carrying Amount Year 2019 2020 2021Step by Step Solution
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