In 2001, Fund Company purchased three pieces of equipment. The equipment is used for different purposes and hence different methods of amortization have been selected. Information concerning the equipment is summarized below: For the declining balance method, Fund Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000 hours. Actual hours of use in the first three yoars were: 2001,1,500;2002,4,800; and 2003,6,000. Instructions (a) Calculate the amount of accumulated amortization on each machine at December 31, 2003. (Round your answer to the nearest dollar.) (b) Early in 2003, the company reviews the remaining useful life and residual values for the machines. The useful life for Machine 1 is now expected to be a total of eight years. The residual value of machine 2 is revised to $20,000 and the total machine hours for Machine 3 is revised to 40,000 . What would be the amortization expense for the machines in 2003 ? (Hint: you have to calculate the balance left to be amortized and the remaining useful life; e.g., for machine 3 the number of hours expected excluding the first two years.) (Round your answer to the nearest dollar.)
In 2001, Fund Company purchased three pieces of equipment. The equipment is used for different purposes and hence different methods of amortization have been selected. Information concerning the equipment is summarized below: For the declining balance method, Fund Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000 hours. Actual hours of use in the first three yoars were: 2001,1,500;2002,4,800; and 2003,6,000. Instructions (a) Calculate the amount of accumulated amortization on each machine at December 31, 2003. (Round your answer to the nearest dollar.) (b) Early in 2003, the company reviews the remaining useful life and residual values for the machines. The useful life for Machine 1 is now expected to be a total of eight years. The residual value of machine 2 is revised to $20,000 and the total machine hours for Machine 3 is revised to 40,000 . What would be the amortization expense for the machines in 2003 ? (Hint: you have to calculate the balance left to be amortized and the remaining useful life; e.g., for machine 3 the number of hours expected excluding the first two years.) (Round your answer to the nearest dollar.)
Related questions
13.
| Equipment was purchased on January 5, 2011, at a cost of$90,000. The equipment had an estimated useful life of 8 years andan estimated residual value of $8,000. 14. Machinery acquired at a cost of $80,000 and on whichthere is accumulated depreciation of $55,000 (includingdepreciation for the current year to date) is exchanged for similarmachinery. For financial reporting purposes, present entries torecord the disposition of the old machinery and the acquisition ofnew machinery under each of the following assumptions:
|
15.
| Machinery is purchased on July 1 of the current fiscal yearfor $240,000. It is expected to have a useful life of 4 years, or25,000 operating hours, and a residual value of $15,000. Computethe depreciation for the last six months of the current fiscal yearending December 31 by each of the following methods:
|
(Round the answer to the nearestdollar.)
