Macon Assembly Company purchased a machine on January 2, 20X3, by paying cash of $85,000. The machine has an estimated useful life of five years (or the production of 200,000 units) and an estimated residual value of $5,000. Required:
1. Determine depreciation expense (to the nearest dollar) for each year of the machine's useful life under (a). straight-line depreciation; and (b). the declining-balance method with a 200% acceleration rate.
2. What is the book value of the machine after three years with the declining-balance method and a 200% acceleration rate?
3. What is the book value of the machinery after three years with straight-line depreciation.
4. If the machine was used to produce and sell 48,000 units in 20X3, what would the depreciation expense be under the units of production method?

Question

Macon Assembly Company purchased a machine on January 2, 20X3, by paying cash of $85,000. The machine has an estimated useful life of five years (or the production of 200,000 units) and an estimated residual value of $5,000. Required: 
1. Determine depreciation expense (to the nearest dollar) for each year of the machine's useful life under (a). straight-line depreciation; and (b). the declining-balance method with a 200% acceleration rate. 
2. What is the book value of the machine after three years with the declining-balance method and a 200% acceleration rate? 
3. What is the book value of the machinery after three years with straight-line depreciation. 
4. If the machine was used to produce and sell 48,000 units in 20X3, what would the depreciation expense be under the units of production method?

Quizplus · Accepted Answer

The Answer of Macon Assembly Company purchased a machine on January 2, 20X3, by paying cash of $85,000. The machine has an estimated useful life of five years (or the production of 200,000 units) and an estimated residual value of $5,000. Required: 
1. Determine depreciation expense (to the nearest dollar) for each year of the machine's useful life under (a). straight-line depreciation; and (b). the declining-balance method with a 200% acceleration rate. 
2. What is the book value of the machine after three years with the declining-balance method and a 200% acceleration rate? 
3. What is the book value of the machinery after three years with straight-line depreciation. 
4. If the machine was used to produce and sell 48,000 units in 20X3, what would the depreciation expense be under the units of production method?

Macon Assembly Company Purchased a Machine on January 2, 20X3