Opt_Prob_Solutions_chap_8_Solutions

Opt_Prob_Solutions_chap_8_Solutions - Chapter 8 Optional...

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Chapter 8 Optional Problem Solutions P8–3. Req. 1 Cost of each machine: Machine A B C Total Purchase price. .................................... $7,600 $25,600 $6,800 $40,000 Installation costs. ................................. 300 500 200 1,000 Renovation costs. ................................ 2,000 400 600 3,000 Total cost. ......................................... $9,900 $26,500 $7,600 $44,000 Req. 2 Computation of depreciation at the end of year 1 for each machine: Machine Method Computation A Straight-line ($9,900 - $1,500) x 1/5 years = $1,680 B Units-of-production ($26,500 - $900) ÷ 20,000 hours = $1.28 $1.28 x 2,000 hours = $2,560 C Double-declining-balance ($7,600 - 0) x 2/4 years = $3,800 Adjusting entry: Depreciation expense ($1,680 + $2,560 + $3,800) (+E, - SE) 8,040 Accumulated depreciation, Machine A (+XA, - A) 1,680 Accumulated depreciation, Machine B (+XA, - A) 2,560 Accumulated depreciation, Machine C (+XA, - A) 3,800
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AP8–5. Req. 1
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Opt_Prob_Solutions_chap_8_Solutions - Chapter 8 Optional...

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