Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 90

Identify depreciation methods used Moyle Co. acquired a machine on January 1, 2010, at a cost of $320,000. The machine is expected to have a five-year useful life, with a salvage value of $20,000. The machine is capable of producing 300,000 units of product in its lifetime. Actual production was as follows: 60,000 units in 2010; 40,000 units in 2011; 80,000 units in 2012; 50,000 units in 2013; and 70,000 units in 2014.

Required:

Identify the depreciation method that would result in each of the following annual credit amount patterns to accumulated depreciation. If a declining-balance method is used, indicate the percentage (150% or 200%). (Hint: What do the amounts shown for each year represent?)

a.	Accumulated Depreciation
		60,000 12/31/10
		40,000 12/31/11
		80,000 12/31/12
		50,000 12/31/13
		70,000 12/31/14

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b.	Accumulated Depreciation
		96,000 12/31/10
		67,200 12/31/11
		47,020 12/31/12
		32,928 12/31/13
		23,050 12/31/14

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c.	Accumulated Depreciation
		128,000 12/31/10
		76,800 12/31/11
		46,080 12/31/12
		27,648 12/31/13
		16,588 12/31/14

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d.	Accumulated Depreciation
		60,000 12/31/10
		60,000 12/31/11
		60,000 12/31/12
		60,000 12/31/13
		60,000 12/31/14

Step 1 of 7

Identify-Depreciation methods used: