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On January 1, Manning Co. purchases and installs a new machine costing $324,000 with a five-year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in Year 1, 320,400 in Year 2, 317,000 in Year 3, 343,600 in Year 4, and 138,500 in Year 5. The total number of units produced by the end of Year 5 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required:  Prepare a table  Units-of-production: Year Number of Units  Depreciation per Unit   Depreciation Expense  1       2       3       4       5       Totals       Double-declining-balance:                 Year Beginning Book Value Annual Depreciation (40% of book value) Accumulated Depreciation at Year-End Ending Book Value ($324,000 Cost less Accumulated Depreciation) 1         2         3         4         5         Totals                             Double-declining-balance rate:                 Straight-line rate Multiplied by (Double) DDB Rate

On January 1, Manning Co. purchases and installs a new machine costing $324,000 with a five-year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in Year 1, 320,400 in Year 2, 317,000 in Year 3, 343,600 in Year 4, and 138,500 in Year 5. The total number of units produced by the end of Year 5 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required:  Prepare a table  Units-of-production: Year Number of Units  Depreciation per Unit   Depreciation Expense  1       2       3       4       5       Totals       Double-declining-balance:                 Year Beginning Book Value Annual Depreciation (40% of book value) Accumulated Depreciation at Year-End Ending Book Value ($324,000 Cost less Accumulated Depreciation) 1         2         3         4         5         Totals                             Double-declining-balance rate:                 Straight-line rate Multiplied by (Double) DDB Rate

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 15PB: Urquhart Global purchases a building to house its administrative offices for $500,000. The best...
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On January 1, Manning Co. purchases and installs a new machine costing $324,000 with a five-year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in Year 1, 320,400 in Year 2, 317,000 in Year 3, 343,600 in Year 4, and 138,500 in Year 5. The total number of units produced by the end of Year 5 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value.

Required: 

Prepare a table 

Units-of-production:
Year Number of Units  Depreciation per Unit   Depreciation Expense 
1      
2      
3      
4      
5      
Totals      
Double-declining-balance:      
         
Year Beginning Book Value Annual Depreciation (40% of book value) Accumulated Depreciation at Year-End Ending Book Value ($324,000 Cost less Accumulated Depreciation)
1        
2        
3        
4        
5        
Totals        
         
         
Double-declining-balance rate:      
         
Straight-line rate Multiplied by (Double) DDB Rate    
         
         
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