The Gruman Company purchased a machine for $220,000 on January 2, 2004. It made the following estimates:

Question:

Service life ...... 5 years or 10,000 hours

Production ...... 200,000 units

Residual value .... $20,000

In 2007, the company uses the machine for 1,800 hours and produces 44,000 units.

Required

Compute the depreciation for 2007 under each of the following methods:

1. Straight-line

2. Hours worked

3. Units of output

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Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

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Question Posted: Mar 12, 2012 03:36 AM

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The Gruman Company purchased a machine for $220,000 on January 2, 2004. It made the following estimates:

Question:

Step by Step Answer:

1 Straightline depreciation Depreciation base Cost Residual value 220000 2000...View the full answer

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