ACCT-2010 Lecture 6: acct notes 6
5 Feb 2018
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A machine that cost ,000 has an estimated residual value of ,000 and an estimated useful life of six years. Calculate its book value at the end of year 5. (cost-residual value) x 1/useful life = depreciation expense = 360,000/6=60,000. Units of production formula : (cost-residual value) x (actual production this period/estimated total production) = depreciation expense. A machine that cost ,000 has an estimated residual value of ,000 and an estimated useful life of 15,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 4,000 hours in year 2, and 5,000 hours in year 3. (225,000-15,000) x (3,000/15,000) = 42,000 (225,000-15,000) x (4,000/15,000) = 56,000 (225,000-15,000) x (5,000/15,000)=70,000. Double-declining balance residual value: (cost- accumulated depreciation) x (2/useful life)= depreciation expense. A machine that cost ,000 has an estimated residual value of ,000 and an estimated useful life of four years.
