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Needing help on Part B On January 1, 2022, Sheffield Company purchased the following two machines for use in its production process. Machine A: The
Needing help on Part B
On January 1, 2022, Sheffield Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $46,500. Related expenditures also paid in cash included: sales tax $3,700. shipping costs $100, insurance during shipping $50, installation and testing costs $70, and $200 of oil and lubricants to be used with the machinery during its first year of operations. Sheffield estimates that the useful life of the machine is 5 years with a $4,300 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. Machine B : The recorded cost of this machine was $180,000. Sheffield estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period. Calculate the amount of depreciation expense that Sheffield should record for Machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places. eg. 12.25. Round final answers to 0 decimal places, eg. 2,125.) (1) Sheffield uses the straight-line method of depreciation. (2) Sheffield uses the declining-balance method. The rate used is twice the straight-line rate. (3) Sheffield uses the units-of-activity method and estimates that the useful life of the machine is 135,880 units. Actual usage is as follows: 2022,50,000 units: 2023,38,500 units; 2024,27,000 units; 2025,20,380 units. (3) Sheffield uses the units-of-activity method and estimates that the useful life of the machine is 135,880 units. Actual usage is as follows: 2022,50,000 units; 2023,38,500 units; 2024,27,000 units; 2025,20,380 units. 3) Sheffield uses the units-of-activity method and estimates that the useful life of the machine is 135,880 units. Actual usage is as follows: 2022,50,000 units: 2023,38,500 units: 2024,27,000 units; 202.5,20,380 units Step by Step Solution
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