Question
Todd Service Company purchased a copier on January 1, 20xx. The following information applies to the copier purchased: Purchase price - $25,000 Delivery cost -
Todd Service Company purchased a copier on January 1, 20xx. The following information applies to the copier purchased:
| Purchase price - | $25,000 |
| Delivery cost - | $ 500 |
| Estimated life - | 4 years |
| Estimated copies produced | 1,000,000 |
| Salvage value | $ 1,500 |
The copies produced as follows:
| Year 1 | 250,000 copies |
| Year 2 | 270,000 copies |
| Year 3 | 320,000 copies |
| Year 4 | 160,000 copies |
Using Excel, determine the amount of depreciation expense and the net book value for each of the four years (6 years for MACRS) using each of the following methods:
Straight-line Double-declining balance Units of production MACRS, assuming the machine is classified as five-year property
Please help me if I didn't fill this in correctly below!!
| Purchase price - | $25,000 | Estimated units produced | 1,000,000 | |||||
| Delivery cost - | $500 | Estimated life - | 4 | years | ||||
| Total cost | ||||||||
| Salvage value | $1,500 | The machine produced as follows: | ||||||
| Depreciable base | ||||||||
| Year 1 | 250,000 | units | ||||||
| Year 2 | 270,000 | units | ||||||
| Year 3 | 320,000 | units | ||||||
| Year 4 | 160,000 | units | ||||||
| Straight Line | ||||||||
| Depreciation Expense | Net Book Value | |||||||
| Year 1 | $6,000 | $25,500 | ||||||
| Year 2 | $6,000 | $19,500 | ||||||
| Year 3 | $6,000 | $13,500 | ||||||
| Year 4 | $6,000 | $7,500 | ||||||
| Double Declining Balance | ||||||||
| Depreciation Expense | Net Book Value | DDB Rate | ||||||
| Year 1 | $ 12,750.00 | $ 25,500.00 | 50% | |||||
| Year 2 | $ 6,375.00 | $ 12,750.00 | 50% | |||||
| Year 3 | $ 3,187.00 | $ 6,375.00 | 50% | |||||
| Year 4 | $ 1,594.00 | $ 3,187.00 | 50% | |||||
| Units of Production | Units of production rate | |||||||
| Depreciation Expense | Net Book Value | |||||||
| Year 1 | $6,000.00 | $24,000.00 | ||||||
| Year 2 | $6,480.00 | $18,000.00 | ||||||
| Year 3 | $7,680.00 | $11,520.00 | ||||||
| Year 4 | $3,840.00 | $3,840.00 | ||||||
| MACRS | ||||||||
| Depreciation Expense | Net Book Value | |||||||
| MACRS Rate | ||||||||
| Year 1 | $5,100.00 | $25,000.00 | 20.00% | |||||
| Year 2 | $6,528.00 | $20,400.00 | 32.00% | |||||
| Year 3 | $2,663.42 | $13,872.00 | 19.20% | |||||
| Year 4 | $1,291.23 | $11,208.58 | 11.52% | |||||
| Year 5 | $1,142.48 | $9,917.35 | 11.52% | |||||
| Year 6 | $505.43 | $8,774.87 | 5.76% | |||||
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Food And Beverage Cost Control
Authors: Lea R. Dopson, David K. Hayes, Jack E. Miller
4th Edition
0471694177, 978-0471694175
