The Winsey Company purchased equipment on January 2, 2010, for - 15594

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The Winsey Company purchased equipment on January 2, 2010, for $700,000the equipment has the following characteristics: Estimated service life 20 years Estimated residual value $50,000 100,000 hours 950,000 units of output During 2010 and 2011, the company used the machine for 4,500 and 5,500 hours, respectively, and produced 40,000 and 60,000 units, respectively. Required: Compute the depreciation for 2010 and 2011 under each of the following methods: 1.Straight-line 2.Hours worked 3.Units of output 4.Sum-of-years’-digits 5.Double-declining-balance 6.150%-declining-balance 7.Computer the company’s return on assets (net income divided by average total assets, as discussed in Chapter 6) for each method for 2010 and 2011, assuming that income before depreciation is $100,000. For simplicity, use ending assets, and ignore interest, income taxes, and other assets.

 

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http://books.google.com.pk/books?id=_ouCLUeCvKwC&pg=PA546&dq=The+sayers+company+purchased+a+building+for+$250,000+on+January+2,+2010.+The+building+has+an+expected&hl=en&sa=X&ei=IQc7Ue_nK4nRtAaf8ICoCg&ved=0CC0Q6AEwAA#v=onepage&q=The%20sayers%20company%20purchased%20a%20building%20for%20%24250%2C000%20on%20January%202%2C%202010.%20The%20building%20has%20an%20expected&f=true

Solution Description

The Winsey Company purchased equipment on January 2, 2010, for $700,000the equipment has the following characteristics: Estimated service life 20 years Estimated residual value $50,000 100,000 hours 950,000 units of output During 2010 and 2011, the company used the m

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