Chapter 8 hw - M8-4Straight- Line Formula:(cost residual...

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Unformatted text preview: M8-4Straight- Line Formula:(cost residual value) X 1/Useful Life =depreciation Expense($21,000- 1,000) X 1/(4 years)= $5,000 per year. So three-year-old machine has a book value of $6,000M8-5Double-declining-balance Formula:(cost accumulated Depreciation) X 2/Useful life = depreciation Expense($25,000 $0 first year) X 2/ (5 yrs) = $10,000($25,000 $10,000 second year) X 2/ (5 yrs) = $6,000($25,000 $16,000) X 2/ (5 yrs) = $3,600$10,000 + 6,000 + 3,600 = $19,600 = accumulated depreciation Net book value = $5,400M8-6Units-of-production formula: (-)=cost Residual Value Estimated Total ProductionActual Production DepreciationExpense,-,,,= ,$21 000 $1 00020 000 Machine hours17 750 hours used$17 750$21,000 - $17,750 = $3,250 = Net book valueM8-8(cost residual value) X 1/Useful Life =depreciation Expense($6,000 - $800) X 1/ 13 yrs = $400 per year$6,000 - $4,000 = Net book value = $2,000Update depreciation expense for year 10:Depreciation Expense (+ E, - SE)$400Accumulated Depreciation (+XA, -A)$400Record of Sale:Cash (+A)$3,000Accumulated Depreciation (-XA, +A)$4,000Store fixtures (-A)$6,000Gain on Sale (+Gain, +SE)$1,000P8-6Jensen CompanyMachine Cash (+A)$9,200AAccumulated Depreciation (-XA, +A)13,500Machine A (Equipment) (-A)21,000Gain on Machine A (+SE)...
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This note was uploaded on 10/21/2009 for the course H ADM 223 taught by Professor Pstrebel during the Spring '07 term at Cornell University (Engineering School).

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Chapter 8 hw - M8-4Straight- Line Formula:(cost residual...

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