Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In 2019, Gruman uses the machine for 1,700 hours and produces 50,000 units. In 2020, Gruman uses the machine for 1,200 hours and produces 34,000 units. If required, round your final answers to the nearest dollar. Compute the depreciation for 2019 and 2020 under each of the following methods: Activity method based on hours worked 2019 $ fill in the blank 7 2020 $ fill in the blank 8 Activity method based on units of output 2019 $ fill in the blank 9 2020 $ fill in the blank 10
Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In 2019, Gruman uses the machine for 1,700 hours and produces 50,000 units. In 2020, Gruman uses the machine for 1,200 hours and produces 34,000 units. If required, round your final answers to the nearest dollar. Compute the depreciation for 2019 and 2020 under each of the following methods: Activity method based on hours worked 2019 $ fill in the blank 7 2020 $ fill in the blank 8 Activity method based on units of output 2019 $ fill in the blank 9 2020 $ fill in the blank 10
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 14P: Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used...
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Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates:
| Service life | 5 years or 10,000 hours |
| Production | 180,000 units |
| Residual value | $ 18,000 |
In 2019, Gruman uses the machine for 1,700 hours and produces 50,000 units. In 2020, Gruman uses the machine for 1,200 hours and produces 34,000 units. If required, round your final answers to the nearest dollar.
Compute the
- Activity method based on hours worked
2019 $ fill in the blank 7 2020 $ fill in the blank 8 - Activity method based on units of output
2019 $ fill in the blank 9 2020 $ fill in the blank 10
Expert Solution
Step 1
Given,
Purchase cost of machine = $198,000
Residual value = $18,000
Estimated production = 180,000 units
Estimated service life in hours = 10,000 hours
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