Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

UNTIL V OR BACK Problem 9-4A -b Blossom Company purchased equipment on March 27, 2018, at a cost of $204,000. Management is contemplating the merits

image text in transcribed
image text in transcribed
image text in transcribed
UNTIL V OR BACK Problem 9-4A -b Blossom Company purchased equipment on March 27, 2018, at a cost of $204,000. Management is contemplating the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $4,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,000 units in 2018; 20,000 units in 2019; 21,000 units in 2020; 20,000 units in 2021; and 5,000 units in 2022. Blossom has a December year end. Prepare separate depreciation schedules for the life of the equipment using: (Round depreciation per unit to 2 decimal places.. 5.28 and final answers to decimal places,.. 5.275.) Straight-line method: Depreciable Depreciation Accumulated Year Amount Expense Depreciation Carrying Amount 2018 2019 2020 2021 2022 Double-diminishing-balance method: Opening Carrying Amount Year Depreciation Accumulated Expense Depreciation Carrying Amount MacBook Air URCES Double-diminishing-balance method: mm 7-2 Opening Carrying Amount Depreciation Accumulated Expense Depreciation Carrying Amount Year 2018 2019 Hem 2020 2021 y Study 2022 Units-of-production method: Depreciation Accumulated Year Units-of-Production Expense Depreciation Carrying Amount 2018 2019 2020 2021 2022 MacBook Air 2020 2021 2022 Study Compare the total depreciation expense and accumulated depreciation under each of the three methods over the life of the equipment. (Round answers to o decimal places, e.g. 5,275.) Straight-Line Units-of-Production Double-Diminishing-Balance Total depreciation expenses Accumulated depreciation Question Attempts: 0 of 1 usedSAVE FOR LATER SUBMIT ANSWE MacBook Air 29 ABB WE ROUQOPHE

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions