E11-4 (Depreciation Computations—Five Methods) Jon Seceda Corp. purchased machinery for $315,000 on May 1, 2014. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2015, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units.
Instructions
From the information given, compute the depreciation charge for 2015 under each of the following methods. (Round to the nearest dollar.)
(a) Straight-line (Note - Utilize Excel formula =SLN(Cost,Salvage,Life) to solve the problem.)
(b) Units-of-output (Note: Since units-of-production has an "s" in it, utilize salvage value in computing period depreciation.)
Cost:
| |
Salvage value:
| |
Depreciable value:
| |
Life units expected:
| |
Depreciation per unit:
| |
Period units:
| |
Period depreciation:
|
(c) Working hours (Note: Working hours is a "units-of-production" method and since units-of-production has an "s" in it, utilize salvage value in computing period depreciation.)
(d) Sum-of-years-digits (Note - Utilize Excel formula =SYD(Cost,Salvage,Life,Period) to solve the problem.) (Note: Second year covers two depreciation periods.)
(e) Declining balance, (10 year life, DDB results in 20% annual rate, use 200% for Factor in Excel). (Note: Utilize Excel formula =DDB(Cost,Salvage,Life,Period,Factor) to solve the problem.
(Note: Second year covers two depreciation periods.)
TUTORIAL PREVIEW
(b) Units-of-output (Note: Since units-of-production has an "s" in it, utilize salvage value in computing period depreciation.)
Cost:
|
$315,000
|
Salvage value:
|
15,000
|
Depreciable value:
|
300,000
|
File name: E11-4 Jon Seceda.xls File type: .XLS PRICE: $7
