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Session 9 Assignment

# Session 9 Assignment - b Units of production 2009 \$264,000...

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ACCT 101 - Chapter 8 Depreciation Problem Homework – 20 points Ivy Industrial Packing Co purchased a packing machine for \$950,000 at the beginning of 2009. The robot has an estimated useful life of four years and an estimated residual value of \$70,000. The packing machine, which should last 20,000 hours, was operated 6,000 in 2009; 8,000 hours in 2010; 4,000 hours in 2011; and 2,000 hours in 2012. Required: 1. Compute the annual depreciation and carrying value (book value) for the robot for 2009, 2010, 2011, and 2012 assuming the following depreciation methods: a. Straight-line 2009 \$220,000 depreciation\$730,000 book value 2010 220,000 depreciation 510,000 book value 2011 220,000 depreciation 290,000 book value 2012 220,000 depreciation 70,000 book value
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Unformatted text preview: b. Units of production 2009 \$264,000 depreciation \$686,000 book value 2010 352,000 depreciation 334,000 book value 2011 176,000 depreciation 158,000 book value 2012 88,000 depreciation 70,000 book value c. Double-declining balance 2009 475,000 depreciation 475,000 book value 2010 237,500 depreciation 237,500 book value 2011 118,750 depreciation 118,750 book value 2012 59,375 depreciation 59,375 book value 2. If the packing machine is sold for \$400,000 on 12/31/2010, what would be the amount of the gain or loss under each depreciation method? Straight-line (\$110,000) Units of Production \$66,000 Double-declining Balance \$162,500 Question: Why does the residual value for the double-declining balance not equal the 70,000?...
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