ACC 510 Week 2 Depreciation_BRYSON_VICTOR

# ACC 510 Week 2 Depreciation_BRYSON_VICTOR - each year of...

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Victor Bryson Weeks 2 Depreciation March 20, 2010 Week 2 Depreciation Refer to page 473 in your text. Problem 10-3A deals with the computation of depreciation using various methods. Read the problem, but you need to do ONLY Requirement B of the case, which is the depreciation computations. (Ignore requirements a and c). Submit your answers to Requirement (b) by midnight Saturday of Week 2. 15 points possible. P10-3A On January 1, 2010, Pele Company purchased the following two machines for use in its production process. Machine B: The recorded cost of this machine was \$160,000. Pele estimates that the useful life of the machine is 4 years with a \$10000 salvage value remaining at the end of that time period. (b) (2) 2010 DDB depreciation \$80,000 (b) Calculate the amount of depreciation expense that Pele should record for machine B

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Unformatted text preview: each year of its useful life under the following assumptions. (1) Pele uses the straight line method of depreciation \$160,000 - \$10,000 = \$150,000 / 4 = \$37,500 ANNUAL DEPRECIATION EXPENSE (2) Pele uses the declining balance method. The rate used is twice the straight line method \$160,000 X 50% = \$80,000 ANNUAL DPRECIATION EXPENSE 2010 \$80,000 Victor Bryson Weeks 2 Depreciation March 20, 2010 2011 \$40,000 2012 \$20,000 2013 \$10,000 (3) Pele uses the units of activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2010 45,000 units: 2011 35,000 2012 25,000 units: 2013 20,000 units \$150,000 / 125,000 = \$1.20 X 45000 2010 \$54000 2011 \$42,000 2012 \$30000 2013 \$24000...
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ACC 510 Week 2 Depreciation_BRYSON_VICTOR - each year of...

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