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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Computing Depreciation under Alternative Methods - Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $10,000. The estimated useful life was four years, and the residual value was $1,000. Assume that the estimated productive life of the machine was 9,000 hours. Actual annual usage was 3,600 hours in year 1; 2,700 hours in year 2; 1,800 hours in year 3; and 900 hours in year 4.
Required:
1. Complete a separate depreciation schedule for each of the alternative methods. Round your answers to the nearest dollar.
a. Straight-line.
b. Units-of-production (use four decimal places for the per unit output factor).
c. Double-declining-balance.
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Method: |
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Year |
Computation |
Depreciation Expense |
Accumulated Depreciation |
Net Book Value |
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At acquisition |
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1 |
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2 |
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2. Assuming that the machine was used directly in the production of one of the products that the company manufactures and sells, what factors might management consider in selecting a preferable depreciation method in conformity with the matching principle?
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