ACC WK6 DQ2.docx - Given Cost of new machine = \$120,000 Estimated Salvage machine\u2019s value = \$15,000 Machine\u2019s life expectancy = 5 years Expected

# ACC WK6 DQ2.docx - Given Cost of new machine = \$120,000...

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Given, Cost of new machine = \$120,000 Estimated Salvage machine’s value = \$15,000 Machine’s life expectancy = 5 years Expected widgets that machine can produce during it useful life = 210,000 unit The New Times company bought the machine and used for three years. On January 1, 2016 they sold that machine at \$45,000. The production capacity of machine over a three-year period is presented below: a. Under Straight line method: “Straight line depreciation is the default method used to recognize the carrying amount of a fixed asset evenly over its useful life” [ CITATION Bra184 \l 1033 ] . It is easy method to calculate depreciation. Depreciation = Original cost - Salvage value / Life of the machines = 120,000 – 15,000 / 5 = \$ 21,000 Years Units 1st year machine produced 80,000 units 2nd year machine produced 50,000 units 3rd year machine produced 30,000 units
Journal entries for depreciation Date Particular L/F Debit Amount Credit Amount Dec 31, 2013 Depreciation expenses A/c To accumulated depreciation A/c (Being equipment depreciated) 21,000 21,000 Dec 31, 2014 Depreciation expenses A/c

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• Spring '18
• Depreciation, straight line depreciation

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