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    Problem 10-5A Calhoon Company

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    https://brainmass.com/economics/personal-finance-savings/problem-10-5a-calhoon-company-165129

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    Part 1. A machine costing $210,000 with a four-year life and an estimated $20,000
    salvage value is installed in Calhoon Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the
    following units: year 1, 121,400; year 2, 122,400; year 3, 119,600; and year 4, 118,200. The total number of
    units produced
    by the end of year 4 exceeds the original estimate?this difference was not
    predicted. (The machine
    must not be depreciated below its estimated salvage value.)
    Required
    Prepare a table with the following column headings and compute depreciation for each
    year (and total
    depreciation of all years combined) for the machine under each depreciation method.
    YEAR STRAIGHT-LINE UNITS OF PRODUCTION DOUBLE DECLINING BALANCE Year
    Straight-Line Units-of-Production Double-Declining-Balance

    Cost of machine $210,000
    Less estimated salvage value 20,000
    Total depreciable cost $190,000

    Year
    Straight-Linea
    Units-of-Productionb Double-Declining-
    Balancec
    1 $ 47,500 $ ...

    Solution Summary

    The solution explains the journal entires for asset acquisition and disposal and the calculation of depreciation amount under straight line, units of production and double declining balance method.

    $2.19

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