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# Need help with the following question. I have answered the

### Resolved Question:

Need help with the following question. I have answered the first part. Need to answer the Straight-line, Declining-balance and Units-of-activity fields.

P10-3A
On January 1, 2008, Pele Company purchased the following two machines for use in its production process.

Machine A The cash price of this machine was \$38,000. Related expenditures included: sales tax \$1,700, shipping costs \$150, insurance during shipping \$80, installation and testing costs \$70, and \$100 of oil and lubricants to be used with the machinery during its first year of operations. Pele estimates that the useful life of the machine is 5 years with a \$5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B The recorded cost of this machine was \$160,000. Pele estimates that the useful life of the machine is 4 years with a \$10,000 salvage value remaining at the end of that time period.

Correct.

Prepare the following for Machine A.

1.

The journal entry to record its purchase on January 1, 2008.
2.

The journal entry to record annual depreciation at December 31, 2008.

Account / Description Debit Credit
1. Machinery \$ 40000
Cash \$ 40000
2. Depreciation expense \$ 7000
Accumulated depreciation \$ 7000

Calculate the amount of depreciation expense that should record for machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places. Round final answers to 0 decimal places, e.g. 125.)

1.

Pele uses the straight-line method of depreciation.
2.

Pele uses the declining-balance method. The rate used is twice the straight-line rate.
3.

Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2008, 45,000 units; 2009, 35,000 units; 2010, 25,000 units; 2011, 20,000 units.

Year 1 Year 2 Year 3 Year 4
1. Straight-line \$ \$ \$ \$
2. Declining-balance \$ \$ \$ \$
3. Units-of-activity \$ \$ \$ \$

Which method used to calculate depreciation on machine B reports the highest amount of depreciation expense in year 1 (2008)? declining-balance method

The highest amount in year 4 (2011)? straight-line method

The highest total amount over the 4-year period? all methods are the same
Submitted: 5 years ago.
Category: Homework
Expert:  Neo replied 5 years ago.
Good day!

Please do not forget to click the Accept button.

For your future questions, please feel free to address them to me by adding "For Neo" at the beginning of your posts.

Thank you so much! :)
Customer: replied 5 years ago.
Ok, what fields, are these figures to be applied to ? I applied similiat nmbers and they wew incorrect. Thanks.

Calculate the amount of depreciation expense that should record for machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places. Round final answers to 0 decimal places, e.g. 125.)

1. Pele uses the straight-line method of depreciation.
2. Pele uses the declining-balance method. The rate used is twice the straight-line rate.
3. Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2008, 45,000 units; 2009, 35,000 units; 2010, 25,000 units; 2011, 20,000 units.
 Year 1 Year 2 Year 3 Year 4 1. Straight-line \$ \$ \$ \$ 2. Declining-balance \$ \$ \$ \$ 3. Units-of-activity \$ \$ \$ \$

Expert:  Neo replied 5 years ago.

Please do not forget to click the Accept button.

Thank you so much! :)
Customer: replied 5 years ago.
Its still wrong. I have one more try before I can not try anymore. ???

 Incorrect.
Calculate the amount of depreciation expense that should record for machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places. Round final answers to 0 decimal places, e.g. 125.)
1. Pele uses the straight-line method of depreciation.

2. Pele uses the declining-balance method. The rate used is twice the straight-line rate.

3. Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2008, 45,000 units; 2009, 35,000 units; 2010, 25,000 units; 2011, 20,000 units.

 Year 1 Year 2 Year 3 Year 4 1. Straight-line \$ \$ \$ \$ 2. Declining-balance \$ \$ \$ \$ 3. Units-of-activity \$ \$ \$ \$

Expert:  Neo replied 5 years ago.

Thank you so much! :)
Customer: replied 5 years ago.
Ok, that last one worked.... Thanks! Got 1 more, I will add a little more for bonus. I really appreciated the help.

Ethics case BYP 9-6

The controller of Ruiz Co. believes that the yearly allowance for doubtful accounts for Ruiz. co. should be 2% of net credit sales. The presdident of Ruiz Co., nervous that the stockholders might expect the company to sustain its 10% growth rate, suggests that the controller increase the allowance for doubtful accounts to 4%. The president thinks that the lower net income, which refects a 6% growth rate, will be a more sustainable rate for Ruiz Co.

Instructions:

a) Who are the stakeholders in this case?

b) Does the president's request pose an ethical dilemma for the controller?

c) Should the controller be concerned with Ruiz co.'s growth rate? Explain your answer.
Expert:  Neo replied 5 years ago.
THIS ANSWER IS LOCKED!

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Category: Homework
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