# Business and Finance homework help

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On June 1, a machine costing \$660,000 with a 5-year life and an estimated \$50,000 salvage value was purchased. It was also estimated that the machine would produce 200,000 units during its life. Actual production would be 40,000 units per year for all five years.

Using the depreciation template provided, determine the amount of depreciation expense for the third year under each of the following assumptions:

The company uses the straight-line method of depreciation.
The company uses the units-of-production method of depreciation.
The company uses the double-declining-balance method of depreciation.
Assuming straight line depreciation, prepare journal entry for the third year.
Assume the company sold the machine at the end of the fourth year for \$100,000. Prepare a journal entry for asset disposal in the fourth year.

Assume you are the chief accountant of ABC Inc., a sheetrock manufacturer. Determine how you will choose, based on best industry practices, the depreciation method for ABC Inc. to use.

Your response to Part 4 should be at least one page and must include title and reference pages. In addition, your paper must be formatted according to the CSU-Global Guide to Writing & APA. Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

 ACT300 Principles of Accoutning I Module 6: Critical Thinking Template Option 1 (Depreciation Template) Straight-Line Depreciation Input amounts Record journal entry for depreciation expense for the third year: Cost \$0 Salvage value 0 Debit Credit Depreciable cost \$0 Dec. 31 Depreciation Expense Useful life 0 years Accumulated Depreciation – Equipment Useful life in units of production 0 To record annual depreciation Record journal entry for asset disposal in the fourth year: Straight line method Formula Cost – Salvage Value * * Depreciable cost = Cost – Salvage Value Debit Credit Useful life in years Dec. 31 Cash Accumulated Depreciation = 0 Loss on disposal Equipment To record disposal of equipment Annual depreciation expense= 0 Also, compute the straight line depreciation rate.  The formula is 100% divided by the useful life in years Compute the straight line depreciation rate below: 0% 0 Straight line depreciation rate #DIV/0! Depreciation for the Period End of Period Annual period Depreciable Cost Depreciation rate Depreciation Expense Accumulated Depreciation Book Value * Year 1 Year 2 Year 3 Year 4 Year 5 ** * Cost of machine ** Salvage value is not depreciated

Last Updated on February 11, 2019 by EssayPro