On January 1,2011,Borba,Inc.purchased a $100,000 machine with an estimated useful life of 10 years or 1,000,000 units and a $10,000 salvage value.The machine actually produced 120,000 units in 2011 and 110,000 units in 2012.
Part A: Calculate depreciation expense and accumulated depreciation using the following three methods:
Part B: In the first year of the machine's life,which method would show the LOWER amount for each of the following financial statement line items? Put an X in the appropriate box.
Definitions:
Accounts Receivable
Money owed to a business by its clients or customers for goods or services delivered on credit.
Notes Payable
Written agreements in which one party agrees to pay another party a certain sum of money at a future date or on demand.
Debit
An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.
Capital
Financial assets or the resources that businesses use to fund their operations and growth, including cash, properties, and equipment.
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