II- Wins plc purchased a new machine on October 1, 2018, at a cost of £120,000. The company estimated that the machine will have a residual value of £12,000. The machine is expected to be used for 12,000 working hours during its 4-year life. Instructions Compute the depreciation expense under the following methods for the year indicated. (a) Straight-line for 2018. (b) Units-of-activity for 2018, assuming machine usage was 1,700 hours. (c) Declining-balance using double the straight-line rate for 2018 and 2019.

II- Wins plc purchased a new machine on October 1, 2018, at a cost of £120,000. The company estimated that the machine will have a residual value of £12,000. The machine is expected to be used for 12,000 working hours during its 4-year life. Instructions Compute the depreciation expense under the following methods for the year indicated. (a) Straight-line for 2018. (b) Units-of-activity for 2018, assuming machine usage was 1,700 hours. (c) Declining-balance using double the straight-line rate for 2018 and 2019.

Name: s Il-Wins plc purchased a new machine on October 1, 2018, at a cost of
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Description: s Il-Wins plc purchased a new machine on October 1, 2018, at a cost of £120,000. The companyestimated that the machine will have a residual value of £12,000. The machine is expected tobe used for 12,000 working hours during its 4-year life.Instructio

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 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
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Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of$12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST.Required:a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June.Calculate the depreciation expense for the year 2019–20 using each of the following depreciationmethods (6 marks) straight-line diminishing balance (depreciation rate has been calculated as 31%) units of production (assume the van was driven 78,000 kilometres during the financial year)b) Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balancemethod. c) Show how the van would appear in the balance sheet prepared at the end of year 2 using Straightline method.
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