Covey Company purchased a machine on January 1, 2016, by paying cash of $250,000. The machine has an estimated useful life of five years, is expected to produce 500,000 units, and has an estimated residual value of $25,000.
Required:
A.Calculate depreciation expense to the nearest whole dollar for each year of the machine's useful life under.1.Straight-line depreciation method.2.Double declining-balance method.
B.What is the book value of the machine after three years using the double declining-balance method?
C.What is the book value of the machinery after three years using the straight-line method?
D.If the machine was used to produce and sell 120,000 units in 2016, what would be the depreciation expense using the units-of-production method?

Question

Quizplus · Accepted Answer

The Answer of Covey Company purchased a machine on January 1, 2016, by paying cash of $250,000. The machine has an estimated useful life of five years, is expected to produce 500,000 units, and has an estimated residual value of $25,000.
Required:
A.Calculate depreciation expense to the nearest whole dollar for each year of the machine's useful life under.1.Straight-line depreciation method.2.Double declining-balance method.
B.What is the book value of the machine after three years using the double declining-balance method?
C.What is the book value of the machinery after three years using the straight-line method?
D.If the machine was used to produce and sell 120,000 units in 2016, what would be the depreciation expense using the units-of-production method?

Covey Company Purchased a Machine on January 1, 2016, by Paying