Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
On January 1, 2021, Meyer bought a new milling machine for $55,000
On January 1, 2021, Meyer bought a new milling machine for $55,000. The machine is estimated to last for 10 years and have a salvage value of $5,000. It is also expected to produce 50,000 units of milled timber. In 2021, Meyer produced 4,850 units of milled timber. How much depreciation expense should Meyer record for 2021 if it used the units-of-production method? $5.500 $5.000 $4,850 $5,485
Question 9 1 pts [Review. Consider what depreciation method is being used and what information is relevant. Some of the information is extraneous. Under both the straight-line method and the units-of-production method, Meyer would subtract estimated salvage value from acquisition cost to derive the "depreciation base": estimated salvage is the part of the cost we will get back, so it is not really cost. 1 On January 4, 2021, Meyer bought a new milling machine for $55,000. The machine is estimated to have a useful life of 10 years and a salvage value of $5,000. It is also expected to produce 50.000 units of milled timber. In 2021, Meyer produced 4,850 units of milled timber. How much depreciation expense should Meyer record for 2021 if it uses the straight-line method? $5,000 $4,850 $5,485 $5.500
Question 8 1 pts [Review] Pemke purchased land with a mineral deposit (bauxite) at a cost of $1,500,000. Also, Pemke paid $100,000 in back taxes to obtain clear legal title to the land. The salvage value of the land (after bauxite is removed) is expected to be $250,000. Pemke expects to mine 2,000,000 tons of bauxite from this deposit. Under the units-of-production method, the depletion expense per each ton of bauxite mined is: See the textbook illustrations for "units-of-production" depletion. $0.675. $6.00 $0.625 $0.875 $8.00.
Expert Solution
(8) Ans. : $ 0.675 Per ton bauxite
First find out total cost of land
Total Cost of Land
|
Mineral deposit |
$ 1,500,000 |
|
+ clear legal |
$ 100,000 |
|
Total |
$ 1,600,000 |
Per ton bauxite Depreciation = Cost of land– residual value / Total estimated activity
= $ $ 1,600,000 - $ 250,000 / 2,000,000 tons
=$ 1,350,000 / 2,000,000 tons
= $ 0.675 Per ton bauxite
(9) Ans.: $ 5,000 Annual depreciation
Straight line method is simplest method as per this method cost of assets minus divided by estimated life of machine. In this method depreciation is equal for every year...
Annual Depreciation = Cost of equipment – residual value / Estimated life of Equipment
= $ 55,000 - $ 5,000 / 10 Years
= $ 50,000 / 10 years
= $ 5,000 Annual depreciation
So first option is right answer...
(10) Ans. 3rd option is right answer$ 4,850 Depreciation
As per Units of activity method depreciation to be found out on the basis of capacity of equipment i.e. whatever actual production or Labour hours used, in this example capacity of equipment is 50,000 units...
Per hour Depreciation = Cost of equipment – residual value / Total estimated activity
= $ 55,000 - $ 5,000 / 50,000 units
=$ 50,000 / 50,000 units
= $ 1 per unit depreciation
2021 Deprecation = 4,850 units * $ 1 per unit depreciation
= $ 4,850 Depreciation
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
