Pearl Manufacturing, Inc. purchased a new piece of manufacturing equipment at a total acquisition cost of $2,400,000 on January 4 of the output and a residual value of $260,800 at the end of its useful life. The following schedule indicates the actual number of units output with Click the icon to view the schedule.) Read the requirement 9 1,925,280 213,920 213.920 474,720 2,400,000 2,400,000 10 2,139,200 260,800 Total $ 2,139,200 N Requirement b. Prepare the depreciation schedule for the manufacturing equipment assuming that Pearl Manufacturing, Inc. used the units dollar. Adjust the depreciation expense and units of output for year 10 to arrive at an ending book value equal to the scrap value.) Units Rate End-of-Year End-of-Year of per Depreciation Original Accumulated Net Book Value Year Output Unit Expense Cost Depreciation (NBV) 1 246,400 2,400,000 $ 246,400 2,153,600 246,400 2,400,000 492,800 1,907,200 3 246,400 2.400,000 723,200 1,676,800 4 246,400 2,400,000 953,600 1,446,400 5 246,400 2,400,000 1.152,000 1,248,000 6 246,400 2.400.000 1,350.400 1,049,600 7 246,400 2,400,000 1,532,800 867,200 8 246,400 2,400,000 1.715,200 684,800 9 246,400 2,400,000 1,881,600 518,400 10 246,400 2,400,000 2,048,000 352,000 5 Total Data table Year Units of Output Year Units of Output 1 1,540,000 6 1,240,000 2 1,540,000 7 1,140,000 3 1,440,000 8 1,140,000 4 1,440,000 9 1,040,000 5 1,240,000 10 1,040,000 Print Done Pearl Manufacturing, Inc. purchased a new piece of manufacturing equipment at a total acquisition cost of $2,400,000 output and a residual value of $260,800 at the end of its useful life. The following schedule indicates the actual numbe Click the icon to view the schedule.) Read the requirements 2 Requirement a. Prepare the depreciation schedule for the manufacturing equipment assuming that Pearl Manufacturir End-of-Year End-of-Year Depreciation Original Accumulated Net Book Value Year Expense Cost Depreciation (NBV) 1 $ 213,920 $ 2,400,000 $ 213,920 $ 2,186,080 2 213,920 2,400,000 427,840 1,972,160 3 213,920 2,400,000 641,760 1,758,240 213,920 2,400,000 855,680 1,544,320 5 213,920 2,400,000 1,069,600 1,330,400 213,920 2,400,000 1,283,520 1.116.480 7 213,920 2,400,000 1,497,440 902,560 213,920 2,400,000 1,711,360 688,640 9 213,920 2,400,000 1,925,280 474,720 10 213,920 2,400,000 2,139,200 260,800 Total 2,139,200 4 6 09 00 9 $ manufacturing equipment at a total acquisition cost of $2.400.000 on January 4 of the current year. The firm estimates that the equipment has a useful to of 10 years or 13,370,000 units of brits useful life. The following schedule indicates the actual number of units output with the machine per year (NBV) for the manufacturing equipment assuming that Pearl Manufacturing, Inc used the straight-line method. End-of-Year End-of-Year Accumulated Net Book Value Depreciation $ 213,920 2,186,080 427 840 1,972, 160 341,760 1.758.240 855,680 1.544,320 1.069,600 1,330,400 1.283.520 1.116.480 1,497 440 902,560 1,711,360 688,640 1925.280 474,720 2.139.200 260.800 or the manufacturing equipment assuming that Pearl Manufacturing, Ine used the units-of-output method. (Enter the rate per unit to the nearest cont. Enter all other amounts to the nearest put for year 10 to arrive at an ending book value equal to the scrap value) Requirements Prepare the depreciation schedules for the manufacturing equipment assuming that Pearl used the following methods (each case is independent): a. Straight-line method. b. Units-of-output method. c. Double-declining balance method. (Reduce the depreciation expense in the last year to the necessary amount to arrive at an ending book value equal to the scrap value.) d. Pearl sells the manufacturing equipment at the end of Year 5 for $1,190,000. What is the gain or loss on sale under each of the depreciation methods in parts (a)-(c)
