On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in...
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Accounting
On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $80,000, and its estimated useful life was four years or 1,000,000 cuttings, after which it could be sold for $5,000.
Calculate the depreciation expense for each year of the machine's useful life under each of the following methods:
a. Straight-line
b. Double-Declining balance
c. Units of Production. Assume annual production in cuttings of 200,000; 350,000; 260,000 and 190,000
Year of Useful Life
Acquisition Cost
Beginnin Book Vlaue
Double decling rate
Anndepreciation
endvalue
year 1
year 2
year 3
year 4
total annual Depreiciation
Repat this chart for all depreciation methods of A, B and C
Assume the company uses the striaght line method and decides to sell the laser cutting machine at the end of the third year. Prepare the following journal entries:
a. Sale of the machine for cash at its book value
b. Sale of the machine for $23,000 cash
c. Sale of the machine for $24,000 cash
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