Compute the depreciation for 2016 and 2017 under each of the following methods: Straight-line method 2016 $ fill in the blank 1 2017 $ fill in the blank 2 Sum-of-the-years'-digits method 2016 $ fill in the blank 3 2017 $ fill in the blank 4 Double-declining-balance method 2016 $ fill in the blank 5 2017 $ fill in the blank 6 Activity method based on hours worked 2016 $ fill in the blank 7 2017 $ fill in the blank 8 Activity method based on units of output 2016 $ fill in the blank 9 2017 $ fill in the blank 10 For each method, what is the book value of the machine at the end of 2016? At the end of 2017? Straight-line method 2016 $ fill in the blank 11 2017 $ fill in the blank 12 Sum-of-the-years'-digits method 2016 $ fill in the blank 13 2017 $ fill in the blank 14 Double-declining-balance method 2016 $ fill in the blank 15 2017 $ fill in the blank 16 Activity method based on hours worked 2016 $ fill in the blank 17 2017 $ fill in the blank 18 Activity method based on units of output 2016 $ fill in the blank 19 2017 $ fill in the blank 20 If Gruman used a service life of 8 years or 15,000 hours and a residual value of $10,000, what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods? Depreciation expense Straight-line method 2016 $ fill in the blank 21 2017 $ fill in the blank 22 Sum-of-the-years'-digits method 2016 $ fill in the blank 23 2017 $ fill in the blank 24 Double-declining-balance method 2016 $ fill in the blank 25 2017 $ fill in the blank 26 Book value Straight-line method 2016 $ fill in the blank 27 2017 $ fill in the blank 28 Sum-of-the-years'-digits method 2016 $ fill in the blank 29 2017 $ fill in the blank 30 Double-declining-balance method 2016 $ fill in the blank 31 2017 $ fill in the blank 32

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 32BE: Depreciation Methods On January 1, 2019, Loeffler Company acquired a machine at a cost of $200,000....

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Depreciation Methods

Gruman Company purchased a machine for $220,000 on January 2, 2016. It made the following estimates:

Service life	5 years or 10,000 hours
Production	200,000 units
Residual value	$20,000

In 2016, Gruman uses the machine for 1,800 hours and produces 44,000 units. In 2017, Gruman uses the machine for 1,500 hours and produces 35,000 units. If required, round your final answers to the nearest dollar.

Required:

Compute the depreciation for 2016 and 2017 under each of the following methods:

Straight-line method

2016 $ fill in the blank 1

2017 $ fill in the blank 2
Sum-of-the-years'-digits method

2016 $ fill in the blank 3

2017 $ fill in the blank 4
Double-declining-balance method

2016 $ fill in the blank 5

2017 $ fill in the blank 6
Activity method based on hours worked

2016 $ fill in the blank 7

2017 $ fill in the blank 8
Activity method based on units of output

2016 $ fill in the blank 9

2017 $ fill in the blank 10

For each method, what is the book value of the machine at the end of 2016? At the end of 2017?

Straight-line method

2016 $ fill in the blank 11

2017 $ fill in the blank 12
Sum-of-the-years'-digits method

2016 $ fill in the blank 13

2017 $ fill in the blank 14
Double-declining-balance method

2016 $ fill in the blank 15

2017 $ fill in the blank 16
Activity method based on hours worked

2016 $ fill in the blank 17

2017 $ fill in the blank 18
Activity method based on units of output

2016 $ fill in the blank 19

2017 $ fill in the blank 20

If Gruman used a service life of 8 years or 15,000 hours and a residual value of $10,000, what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods?

Depreciation expense

Straight-line method

2016 $ fill in the blank 21

2017 $ fill in the blank 22
Sum-of-the-years'-digits method

2016 $ fill in the blank 23

2017 $ fill in the blank 24
Double-declining-balance method

2016 $ fill in the blank 25

2017 $ fill in the blank 26

Book value

Straight-line method

2016 $ fill in the blank 27

2017 $ fill in the blank 28
Sum-of-the-years'-digits method

2016 $ fill in the blank 29

2017 $ fill in the blank 30
Double-declining-balance method

2016 $ fill in the blank 31

2017 $ fill in the blank 32

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