Moore,IncPurchased Slot Machines at the Beginning of 2017 for $20,000

question 137

Essay

Moore,Inc.purchased slot machines at the beginning of 2017 for $20,000.The machines have an estimated residual value of $2,000 and an estimated life of five years or 20,000 hours of operation.Moore is looking at alternative depreciation methods for the equipment.Calculate the following:
A. Accumulated depreciation at December 31,2018 , using the straight-line depreciation method.

B. Depreciation expense for 2017 using the units-of-production depreciation method. Assume that the machines are operated for 5,000 hours in 2017 .

C. Book value of the equipment at December 31,2018, using the double-declining-bal ance depreciation method.

D. What are the advantages of using straight-line depreciation for financial reporting purposes?

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Definitions:

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together, representing the strength and direction of their relationship.

Scientific Research Methods

Systematic procedures and techniques employed during scientific inquiry to gather, analyze, and interpret data.

Spurious

Pertaining to a false relationship where two variables appear directly related but are actually connected through a third variable.

Causal

Pertaining to a cause-and-effect relationship, where one event (the cause) is understood to precipitate another event or condition (the effect).