Ef 507. 1A machine costing $212,800 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory onJanuary 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces thefollowing units: 122,900 in Year 1, 123,700 in Year 2, 120,300 in Year 3, 130,100 in Year 4. The total number of units produced by the endof Year 4 exceeds the original estimate this difference was not predicted. Note: The machine cannot be depreciated below itsestimated salvage value.23Required:Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.(Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)4Straight LineComplete this question by entering your answers in the tabs below.1aCompute depreciation for each year (and total depreciation of all years combined) for the machine under the Units ofproduction,YearStraight LineYearYearYearYearYearUnits ofProductionYearTotalYearUnits122,900123.700Complete this question by entering your answers in the tabs below.Units ofProductionCompute depreciation for each year (and total depreciation of all years combined) for the machine under the Units ofproduction.Answer is complete but not entirely correct.DDBUnits122,900123,700120,300130,100Units of ProductionDepreciableUnitsDepreciationper unit0.400:40121,900 $122.500 x sDDBUnits of ProductionDepreciableUnitsDepreciationExpense48 760121,900 $122,500 $120,700 S$121,900 $S 487,00049,000 xDepreciationper unit0.400.400.400.40< Straight LineDepreciationExpense$$48,760 X49,000 X48,280 X48,760 X194,800DDB >

Unit of Production Method - This is the method of computing depreciation. Under this method units…

A machine costing $212,800 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 123,700 in Year 2, 120,300 in Year 3, 130,100 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Straight Line 1 Year Units of Production Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production, Year Year Units Answer is complete but not entirely correct. DDB 122,900 123.700 Units of Production Depreciable Units Depreciation per unit 0.40 121,900 $ 122.500 040 Depreciation Expense 48,760 49,000

A machine costing $212,800 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 123,700 in Year 2, 120,300 in Year 3, 130,100 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Straight Line 1 Year Units of Production Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production, Year Year Units Answer is complete but not entirely correct. DDB 122,900 123.700 Units of Production Depreciable Units Depreciation per unit 0.40 121,900 $ 122.500 040 Depreciation Expense 48,760 49,000

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter10: Long-term Assets: Fixed And Intangible

Section: Chapter Questions

Problem 10.5CP: Communication Godwin Co. owns three delivery trucks. Details for each truck at the end of the most...

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Communication Godwin Co. owns three delivery trucks. Details for each truck at the end of the most recent year follow: At the beginning of the year, a hydraulic lift is added to Truck 1 at a cost of 4,500. The addition of the hydraulic lift will allow the company to deliver much larger objects than could previously be delivered. At the beginning of the year, the engine of Truck 2 is overhauled at a cost of 5,000. The engine overhaul will extend the trucks useful life by three years. Write a short memo to Godwins chief financial officer explaining the financial statement effects of the expenditures associated with Trucks 1 and 2.
St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting cardiac catheterization testing in SJMCs Cath Lab. Each technician is paid a salary of 36,000 and is capable of conducting 1,000 procedures per year. The cardiac catheterization equipment is one year old and was purchased for 250,000. It is expected to last five years. The equipments capacity is 25,000 procedures over its life. Depreciation is computed on a straight-line basis, with no salvage value expected. The reading of the catheterization results is conducted by an outside physician whose fee is 120 per test. The technicians report with the outside physicians note of results is sent to the referring physician. In addition to the salaries and equipment, SJMC spends 50,000 for supplies and other costs needed to operate the equipment (assuming 5,000 procedures are conducted). When SJMC purchased the equipment, it fully expected to perform 5,000 procedures per year. In fact, during its first year of operation, 5,000 procedures were run. However, a larger hospital has established a clinic in the city and will siphon off some of SJMCs business. During the coming years, SJMC expects to run only 4,200 cath procedures yearly. SJMC has been charging 850 for the procedureenough to cover the direct costs of the procedure plus an assignment of general overhead (e.g., depreciation on the hospital building, lighting and heating, and janitorial services). At the beginning of the second year, an HMO from a neighboring community approached SJMC and offered to send its clients to SJMC for cardiac catheterization provided that the charge per procedure would be 550. The HMO estimates that it can provide about 500 patients per year. The HMO has indicated that the arrangement is temporaryfor one year only. The HMO expects to have its own testing capabilities within one year. Required: 1. Classify the resources associated with the cardiac catheterization activity into one of the following: (1) committed resources, or (2) flexible resources. 2. Calculate the activity rate for the cardiac catheterization activity. Break the activity rate into fixed and variable components. Now, classify each activity resource as relevant or irrelevant with respect to the following alternatives: (1) accept the HMO offer, or (2) reject the HMO offer. Explain your reasoning. 3. Assume that SJMC will accept the HMO offer if it reduces the hospitals operating costs. Should the HMO offer be accepted? 4. Jerold Bosserman, SJMCs hospital controller, argued against accepting the HMOs offer. Instead, he argued that the hospital should be increasing the charge per procedure rather than accepting business that doesnt even cover full costs. He also was concerned about local physician reaction if word got out that the HMO was receiving procedures for 550. Discuss the merits of Jerolds position. Include in your discussion an assessment of the price increase that would be needed if the objective is to maintain total revenues from cardiac catheterizations experienced in the first year of operation. 5. Chandra Denton, SJMCs administrator, has been informed that one of the Cath Lab technicians is leaving for an opportunity at a larger hospital. She met with the other technicians, and they agreed to increase their hours to pick up the slack so that SJMC wont need to hire another technician. By working a couple hours extra every week, each remaining technician can perform 1,050 procedures per year. They agreed to do this for an increase in salary of 2,000 per year. How does this outcome affect the analysis of the HMO offer? 6. Assuming that SJMC wants to bring in the same revenues earned in the cardiac catheterization activitys first year less the reduction in resource spending attributable to using only four technicians, how much must SJMC charge for a procedure?
(2). A machine costing $207,800 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 477,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 122,900 in Year 2, 121,100 in Year 3, 120,100 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.
Part 1. A machine costing $22,000 with a five-year life and an estimated $2,000 salvage value is installed on January 1. The manager estimates the machine will produce 1,000 units of product during its life. It actually produces the following units: 200 in Year 1, 400 in Year 2, 300 in Year 3, 80 in Year 4, and 30 in Year 5. The total units produced by the end of Year 5 exceed the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.) Compute depreciation expense for each year and total depreciation for all years combined under straight-line, units-of-production, and double-declining-balance. Part 2. In early January, a company acquires equipment for $3,800. The company estimates this equipment has a useful life of three years and a salvage value of $200. On January 1 of the third year, the company changes its estimates to a total four-year useful life and zero salvage value. Using the straight-line method, what is…
A machine costing $217,200 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 493,000 units of product during its life. It actually produces the following units: 122,200 in Year 1, 124,100 in Year 2, 121,500 in Year 3, 135,200 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) A machine costing $217,200 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce…
A machine costing $209,000 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 480,000 units of product during its life. It actually produces the following units: 122,900 in Year 1, 123,300 in Year 2, 119,900 in Year 3, 123,900 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value.Required:Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation. Straight-Line…
A machine costing $209,400 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 476,000 units of product during its life. It actually produces the following units: 122,800 in Year 1, 123,400 in Year 2, 120,800 in Year 3, 119,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) SEE PICTURES !!!!
A machine costing $210,200 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 478,000 units of product during its life. It actually produces the following units: 121,800 in Year 1, 122,400 in Year 2, 119,600 in Year 3, 124,200 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation. Straight-Line Depreciation…
A machine costing $210,200 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 478,000 units of product during its life. It actually produces the following units: 121,800 in Year 1, 122,400 in Year 2, 119,600 in Year 3, 124,200 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Units of Production Year Units…
A machine costing $210,200 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 478,000 units of product during its life. It actually produces the following units: 121,800 in Year 1, 122,400 in Year 2, 119,600 in Year 3, 124,200 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) ompute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-declining-balance. DDB Depreciation for the…
A machine costing $207,400 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 476,000 units of product during its life. It actually produces the following units: 122,400 in Year 1, 123,400 in Year 2, 120,300 in Year 3, 119,900 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.) Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation. Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-declining-balance.
A machine costing $207,200 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 478,000 units of product during its life. It actually produces the following units: 122,100 in Year 1, 123,600 in Year 2, 121,000 in Year 3, 121,300 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. \table[[Straight Line,\table[[Units of],[Production]],\table[[Double],[declining],[balance]]]] Compute depreciation for each year…