Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2022, Marigold Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine
On January 1, 2022, Marigold Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $ 41,000. Related expenditures also paid in cash included: sales tax $ 1,650, shipping costs $ 200, insurance during shipping $ 50, installation and testing costs $ 90, and $ 200 of oil and lubricants to be used with the machinery during its first year of operations. Marigold estimates that the useful life of the machine is 5 years with a $ 4,400 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. Marigold estimates that the useful life of the machine is 4 years with a $ 16,800 salvage value remaining at the end of that time period. Calculate the amount of depreciation expense that Marigold should record for Machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to O decimal places, e.g. 2,125.) (1) Marigold uses the straight-line method of depreciation. (2) Marigold uses the declining-balance method. The rate used is twice the straight-line rate. (3) Marigold uses the units-of-activity method and estimates that the useful life of the machine is 136,000 units. Actual usage is as follows: 2022, 49,000 units; 2023, 38,000 units; 2024, 27,000 units; and 2025, 22,000 units. Depreciation Expense 2022 2023 2024 2025 Straight- line method $ $ $ $ Declining- balance method $ $ $ Units-of- activity method $ $ $ $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started