On January 1, 2022. Novak Company purchased the following two machines for use in its production process.Machine A: The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $3,650,shipping costs $200, insurance during shipping $100, installation and testing costs $60, and $150 of oil andlubricants to be used with the machinery during its first year of operations. Novak estimates that the useful lifeof the machine is 5 years with a $4,400 salvage value remaining at the end of that time period. Assume that thestraight-line method of depreciation is used.Machine B:The recorded cost of this machine was $180,000. Novak estimates that the useful life of the machine is 4 yearswith a $9,500 salvage value remaining at the end of that time period.(a)Your AnswerCorrect Answer (Used) Calculate the amount of depreciation expense that Novak should record for Machine B each year of its useful life under thefollowing assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to 0decimal places, e.g. 2,125.)(1) Novak uses the straight-line method of depreciation.(2) Novak uses the declining-balance method. The rate used is twice the straight-line rate.(3)Novak uses the units-of-activity method and estimates that the useful life of the machine is 155,000 units. Actualusage is as follows: 2022, 52,500 units; 2023, 42,500 units; 2024, 32,500 units; and 2025, 27,500 units.Depreciation Expense20222023202420Straight-linemethodDeclining-balancemethodUnits-of-activitymethodTauthool, and Moin%24%24%24%24

Name: On January 1, 2022. Novak Company purchased the following two machine
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Description: On January 1, 2022. Novak Company purchased the following two machines for use in its production process.Machine A: The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $3,650,shipping costs $200, in

The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…

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On January 1, 2022. Novak Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $3,650, shipping costs $200, insurance during shipping $100, installation and testing costs $60, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Novak estimates that the useful life of the machine is 5 years with a $4,400 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 $180,000. Novak estimates that the useful life of the machine is 4 years with a $9,500 salvage value remaining at the end of that time period. (a)

On January 1, 2022. Novak Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $53,500. Related expenditures also paid in cash included: sales tax $3,650, shipping costs $200, insurance during shipping $100, installation and testing costs $60, and $150 of oil and lubricants to be used with the machinery during its first year of operations. Novak estimates that the useful life of the machine is 5 years with a $4,400 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 $180,000. Novak estimates that the useful life of the machine is 4 years with a $9,500 salvage value remaining at the end of that time period. (a)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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