Question
On January 1, the Hanover Beverage Company replaced the palletizing machine on one of its juice lines. The cost of the machine was $195,000. The
On January 1, the Hanover Beverage Company replaced the palletizing machine on one of its juice lines. The cost of the machine was $195,000. The machine's expected life is five years or 480,000 units, and its estimated salvage value is $19,500.
The following numbers of units were produced over the next four years:
Year
Units
1
121,000
2
119,500
3
122,600
4
123,000
At the end of the 4th year, the total number of units produced exceeded expectations.
Note: Depreciation cannot drop below its estimated salvage value.
Determine the depreciation on the palletizer for each of the four years, as well as the combined total for all four years. Use two of the following three methods of depreciation. For distinguished performance, use all three methods. Round your answers to the nearest dollar.
· Straight-line.
· Units-of-production.
· Double-declining-balance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the depreciation on the palletizer for each of the four years and the combined total for all four years we will calculate the depreciation using the straightline unitsofproduction and dou...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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