BMAL 530 Homework 2

Description

Question 1

 

On January 1, the Matthews Band pays $68,400 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $1,000. During the first year, the band performs 45 concerts.

 

Compute the first-year depreciation using the straight-line method.

 

Question 2

 

On January 1, the Matthews Band pays $66,400 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $1,000. During the first year, the band performs 45 concerts.

 

Compute the first-year depreciation using the units-of-production method.

 

Select formula for the depreciation rate of Units of Production:

 

Question 3

 

A building is acquired on January 1, at a cost of $1,020,000 with an estimated useful life of 10 years and salvage value of $91,800.

 

Compute depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.)

 

Question 4

 

Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $86,800. The machine’s useful life is estimated at 20 years, or 404,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 34,400 units of product.

 

Determine the machine’s second-year depreciation and year end book value under the straight-line method.

 

Question 5

 

Determine the machine’s second-year depreciation using the units-of-production method.

 

Question 6

 

Determine the machine’s second-year depreciation using the double-declining-balance method.

 

Question 7

 

NewTech purchases computer equipment for $266,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $27,000.

 

Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation.

 

Question 8

 

Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. (Enter all amounts positive values.)