Plant Assets and Depreciation Bunnicula Inc purchased a machine for the business on 1 March 20X7 for $12,000. The company incurred additional costs for transportation of $1,300 and installation of $2,000. Shortly after she started to use the machine, it broke down and the repairs of the machine cost $600. Angela charges depreciation at 10% per annum on straight line basis with a full year's charge in the year of acquisition. Required: Calculate the correct net book value of the machine at the year-end date of 31 December 20X7.
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- Purchase price: $12,000 - Transportation cost: $1,300 - Installation cost: $2,000 Total cost = $12,000 + $1,300 + $2,000 = $15,300 Show more…
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Angela purchased a machine for her business on 1 March 20X1 for $12,000. She incurred additional costs for transportation of $1,300 and installation of $2,000. Shortly after she started to use the machine, it broke down and the repairs of the machine cost $600. Angela charges depreciation at 10% per annum on straight line basis with a full year’s charge in the year of acquisition. Required: Calculate the correct net book value of the machine at the year-end date of 31 December 20X1.
Brooke B.
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,200. The machine's useful life is estimated at 10 years, or 386,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 32,600 units of product. Determine the machine’s second-year depreciation and year-end book value under the straight-line method. Straight-Line Depreciation: Annual Depreciation Expense = (Cost - Salvage Value) / Useful Life Year 2 Depreciation = Annual Depreciation Expense * (Units Produced in Year 2 / Total Units of Product) Year-end book value (Year 2) = Cost - (Depreciation Expense * Number of Years)
A) A machine that cost $100,000 has an estimated residual value of $10,000 and an estimated useful life of 10,000 machine hours. The company uses units-of-production depreciation and ran the machine 1,000 hours in year 1, 2,000 hours in year 2, and 4,000 hours in year 3. Calculate its book value at the end of year 3. B) A machine that cost $360,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses straight-line depreciation. Calculate its book value at the end of year 3.
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