Lord Company purchased a machine on January 2, Year 1, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During Year 1, Lord produced 12,000 units in 2,500 hours. In Year 2, Lord produced 15,000 units in 3,000 hours. c. Prepare a schedule showing depreciation expense for Year 1 and Year 2 and the book value of the asset at the end of Year 1 and Year 2 for the activity method based on units of output. LORD COMPANYDepreciation ScheduleActivity method: Units of output Beginning Book Value Depreciation Ending Book Value Year 1 $fill in the blank 6a1d42016fd5fd8_1 $fill in the blank 6a1d42016fd5fd8_2 $fill in the blank 6a1d42016fd5fd8_3 Year 2 $fill in the blank 6a1d42016fd5fd8_4 $fill in the blank 6a1d42016fd5fd8_5 $fill in the blank 6a1d42016fd5fd8_6
Lord Company purchased a machine on January 2, Year 1, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During Year 1, Lord produced 12,000 units in 2,500 hours. In Year 2, Lord produced 15,000 units in 3,000 hours. c. Prepare a schedule showing depreciation expense for Year 1 and Year 2 and the book value of the asset at the end of Year 1 and Year 2 for the activity method based on units of output. LORD COMPANYDepreciation ScheduleActivity method: Units of output Beginning Book Value Depreciation Ending Book Value Year 1 $fill in the blank 6a1d42016fd5fd8_1 $fill in the blank 6a1d42016fd5fd8_2 $fill in the blank 6a1d42016fd5fd8_3 Year 2 $fill in the blank 6a1d42016fd5fd8_4 $fill in the blank 6a1d42016fd5fd8_5 $fill in the blank 6a1d42016fd5fd8_6
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...
Related questions
Question
Lord Company purchased a machine on January 2, Year 1, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During Year 1, Lord produced 12,000 units in 2,500 hours. In Year 2, Lord produced 15,000 units in 3,000 hours.
c. Prepare a schedule showing
LORD COMPANYDepreciation ScheduleActivity method: Units of output
| Beginning Book Value | Depreciation | Ending Book Value | |
|---|---|---|---|
| Year 1 | $fill in the blank 6a1d42016fd5fd8_1 | $fill in the blank 6a1d42016fd5fd8_2 | $fill in the blank 6a1d42016fd5fd8_3 |
| Year 2 | $fill in the blank 6a1d42016fd5fd8_4 | $fill in the blank 6a1d42016fd5fd8_5 |
$fill in the blank 6a1d42016fd5fd8_6
|
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