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Acquisition Cost and Depreciation Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the...

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Accounting

Acquisition Cost and Depreciation Reveille, Inc., purchasedMachine #204 on April 1, 2016, and placed the machine intoproduction on April 3, 2016. The following information is relevantto Machine #204: Price $60,000 Freight-in costs 2,500 Preparationand installation costs 3,900 Labor costs during regular productionoperation 10,200 Credit terms 2/10, n/30 Total productive output138,500 units The company expects that the machine could be usedfor 10 years, after which the salvage value would be zero. However,Reveille intends to use the machine only 8 years, after which itexpects to be able to sell it for $9,800. The invoice for Machine#204 was paid April 10, 2016. The number of units produced in 2016and 2017 was 23,200 and 29,000, respectively. Reveille computesdepreciation expense to the nearest whole month. Required: Computethe depreciation expense for 2016 and 2017, using the followingmethods. Round your answer to the nearest dollar. Straight-linemethod: 2016 depreciation = $ 2017 depreciation = $Sum-of-the-years'-digits method: 2016 depreciation = $ 2017depreciation = $ Double-declining-balance method: 2016 depreciation= $ 2017 depreciation = $ Activity method (units of production):2016 depreciation = $ 2017 depreciation = $

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3.6 Ratings (538 Votes)
Cost of the asset Price Freight Installaltion Cost 60000 2500 3900 66400 1 Straight Line Method Depreciation for the year 2016 Cost of AssetSalvage Value Useful Life of the Asset912 6640098008912 530625    See Answer
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