Question
Please help. Need help with an Accounting question. Acquisition Cost and Depreciation Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the machine
Please help. Need help with an Accounting question.
Acquisition Cost and Depreciation
Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the machine into production on April 3, 2016. The following information is relevant to Machine #204:
Price | $60,000 |
Freight-in costs | 2,500 |
Preparation and installation costs | 3,900 |
Labor costs during regular production operation | 10,200 |
Credit terms | 2/10, n/30 |
Total productive output | 138,500 units |
The company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille intends to use the machine only 8 years, after which it expects to be able to sell it for $9,800. The invoice for Machine #204 was paid April 10, 2016. The number of units produced in 2016 and 2017 was 23,200 and 29,000, respectively. Reveille computes depreciation expense to the nearest whole month.
Required:
Compute the depreciation expense for 2016 and 2017, using the following methods. Round your answers to the nearest dollar.
1)Straight-line method: 2016 depreciation = $ 2017 depreciation = $
2)Sum-of-the-years'-digits method: 2016 depreciation = $ 2017 depreciation = $
3)Double-declining-balance method: 2016 depreciation = $ 2017 depreciation = $
4)Activity method (units of production): 2016 depreciation = $ 2017 depreciation = $
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