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On January 1, 2022, Tamarisk Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine
On January 1, 2022, Tamarisk Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $39,500. Related expenditures also paid in cash included: sales tax $3,000, shipping costs $200, insurance during shipping $60, installation and testing costs $100, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Tamarisk estimates that the useful life of the machine is 5 years with a $4,100 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. The recorded cost of this machine was $180,000. Tamarisk estimates that the useful life of the machine is 4 years with a $9,440 salvage value remaining at the end of that time period. Machine B: (b) Calculate the amount of depreciation expense that Tamarisk 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 decimal places, e.g. 2,125.) (1) Tamarisk uses the straight-line method of depreciation. (2) Tamarisk uses the declining-balance method. The rate used is twice the straight-line rate. (3) Tamarisk uses the units-of-activity method and estimates that the useful life of the machine is 164,000 units. Actual usage is as follows: 2022, 61,000 units; 2023, 46,000 units; 2024, 31,000 units; and 2025, 26,000 units. Depreciation Expense 2022 2023 2024 Straight- line method $ $ $ $ Declining- balance method $ $ $ $ Units-of- activity method $ $ $ $ e Textbook and Media List of Accounts
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