Fundamental Accounting Principles
Not what you're looking for?
P1-8B In recent years, Letterman Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning the machines is summarized below.
(see chart in attached file)
For the declining-balance method, the company uses the double-declining rate. For the of- units of activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years were: 2002, 1,000; 2003, 4,500; and 2004, 5,000.
Instructions In Microsoft Excel
(a) Compute the amount of accumulated depreciation on each machine at December 31, 2002.
(b) If machine 2 had been purchased on April 1 instead of January 1, what would be the depreciation expense for this machine in (1) 2000 and (2) 2001?
Purchase this Solution
Solution Summary
This question involves the fundamentals of accounting
Solution Preview
Hi there,
<br>
<br>A)
<br>
<br>Machine 1:
<br>cost = 96,000
<br>useful life 10 yrs
<br>salvage value = 6,000
<br>
<br>Straight line depreciation calculation
<br>
<br>96,000 - 6,000 = 90,000 / 10 years = 9,000 per year
<br>By 12/31/02, four years worth of depreciation will have occurred, thus the total depreciation would be 36,000.
<br>
<br>Machine 2
<br>
<br>cost = 60,000
<br>useful life 8 yrs
<br>salvage value = 10,000 ...
Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.