8. Long Lived Assets
Depreciation for Partial Years
8. Long Lived Assets
Depreciation for Partial Years
1
concept
Depreciation for Partial Years
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Problem
ProblemDBQ Company purchased a machine on July 1, Year 1 for $60,000. The company estimated a five year useful life and $8,000 residual value. If the company uses the double-declining-balance method for depreciation, what will be the amount of accumulated depreciation on December 31, Year 2?
A
$27,040
B
$31,200
C
$38,400
D
$41,600
3
Problem
ProblemDAB Company purchased a machine on November 1, Year 1 for $12,000. DAB estimated that the machine could produce 60,000 units over its useful life and would be worth $2,000 as scrap. During Year 1, DAB produced 3,000 units. During Year 2, DAB produced 12,000 units. During Year 3, DAB produced 9,000 units. If DAB uses the units-ofproduction method for depreciation, what would be the net book value of the machine at the end of Year 2?
A
$2,500
B
$4,000
C
$7,500
D
$8,000
E
$9,500