Problem I
Presented below is information related to Le Brown James Manufacturing Inc.
|
Asset
|
Cost
|
Estimated Salvage
|
Estimated Life
|
|
A
|
40,500
|
5,500
|
10
|
|
B
|
33,600
|
4,800
|
9
|
|
C
|
36,000
|
3,600
|
9
|
|
D
|
19,000
|
1,500
|
7
|
|
E
|
23,500
|
2,500
|
6
|
Instructions:
A. Compute the depreciation per year for each asset.
B. Compute de rate / Composite life of depreciation per year to be applied to the plant assets under the composite method.
C. Compute the depreciation using composite method.
Problem II
On January 1, 2012, a machine was purchased for $ 90,000. The machine has a estimated salvage value of $ 6,000 and useful life of 5 years. It can operate for 100,000 hours. The machine operate as follows:
2012 - 20,00o hours
2013 _ 25,000 hours
2014 - 15,000 hours
2015 - 30,000 hours
2016 _10,000 hours
Instructions:
A. Compute the annual depreciation over the machine life assuming December 31 year end for each of the following depreciation methods:
a. Units of output
b. Doble declining balance
B. Assume a fiscal year end on September 30. Compute the depreciation and the book value at end for the following periods:
a. September 30, 2012
b. December 31, 2012
c. September 30, 2013
d. December 31, 2013
e. September 30, 2014
f. December 31, 2014.