Solution-Calculate how much the machinery should be sold

Calculate how much the machinery should be sold

Reference no: EM133102083

Question - XYZ Co. purchased a machinery on 1 June 2015, at a cost of $85,000. The machinery is expected to have a useful like of 15 years and is also expected to run for a total of 220,000 hours. The residual value at the end of it's useful life is estimated to be $6,000. The machinery is expected to run for 8100 hours in 2015, 14500 hours in 2016, 14000 hours in 2017, 15500 hours in 2018 and 14000 hours in 2019.

Required -

a. Calculate the values of Depreciation Expense, Accumulated Depreciation and Book Value, for the first three years only, using the following methods:

i. Straight Line Method, ii. Units of Activity Method, iii. Reducing Balance Method at 30%.

b. Assume that XYZ Co. wants to sell the machinery on 1 July 2016 and intends to make a profit of $10,000. Calculate how much the machinery should be sold for, in order to make a gain of $10,000?

Reference no: EM133102083

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Calculate how much the machinery should be sold

Reference no: EM133102083

Reference no: EM133102083

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