Hogan Manufacturing Company purchased a machine for $250,000. The company expects the service life of...
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Accounting
Hogan Manufacturing Company purchased a machine for $250,000. The company expects the service life of the machine to be 5 years. During that time, it is expected that the machine will produce 140,000 units in total. The anticipated residual value is $40,000. The machine was disposed of after 5 years of use. Actual production during the first 2 years of the assets life was:
Year
Actual Units Produced
1
24,000
2
36,000
Required: Fill in the missing data in the following tables for the first 2 years using different depreciation methods.
Using the Sum-of-the-Years-Digit (SYD) depreciation method (2 points):
Year
Depreciation
base
Depreciation
rate per year
Depreciation
expense
Accumulated
depreciation
Book value
at year end
1
2
Using the Double-Declining-Balance (DDB) depreciation method (2 points):
Year
Book value
at year beginning
Depreciation
rate per year
Depreciation
expense
Accumulated
depreciation
Book value
at year end
1
2
Using the Units-of-Production (UOP) depreciation method (1 point):
Year
Actual units produced
Depreciation
rate per unit
Depreciation
expense
Accumulated
depreciation
Book value
at year end
1
2
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