Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: Purchase price $ 71,000 Delivery cost $ 3,000 Installation charge $ 2,000 Estimated life 5 years Estimated units 146,000 Salvage estimate $ 3,000 During Year 1, the machine produced 42,000 units, and during Year 2 it produced 44,000 units. Required a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the m

a. The amount of depreciation expense for Year 1 and Year 2 using straight-line method is for year 1 and year 2 $14,600

b. the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance is for year 1 $30,400  and for year 2 $18,240

c.  the amount of depreciation expense for Year 1 and Year 2 using units of production method is for year 1 $21,840  and for year 2 is $22,880

d. the amount of depreciation expense for Year 1 and Year 2 using MACRS is for year 1 $10,860  and for year 2 $18,612

Explanation:

a. To calculate the amount of depreciation expense for Year 1 and Year 2 using straight-line method we would have to make the following calculation:

Straight line Depreciation   = ($71,000 + $3,000 + $2,000- $3,000) /5 = $14,600

For each year same depreciation

B)  To calculate the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method we have to make the following calculations:

Double declining method = 1/5 * 2 = 40%

Year 1 depreciation -= $76,000 *40% = $30,400

Year 2   Depreciation = ($76,000 - $30,400) 40% = $18,240

c)  To calculate the amount of depreciation expense for Year 1 and Year 2 using units of production method we have to make the following calculations:

Unit production method

76000/146000 = 0.52

Year 1   42,000 *0.52 = $21,840

Year 2   44,000 * .52 = $22,880

d)  To calculate the amount of depreciation expense for Year 1 and Year 2 using MACRS we have to make the following calclations:

MACRS

Year 1   = 76000 *14.29% = $10,860

Year 2=   - 76000  *24.49% = $18,612

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; the above statement is (true);