SU1201 X Secure httpsovgcenga Maindo Check My Work a remaini

SU1201 X Secure https//ovg.cenga Maindo? Check My Work (a remaining) Computation of Income Using Matching For Machine A, selling price $125,000, production cost $67000 For Machine B, selling price $235,000. production cost $140,00 For Machine C, selling price $72,000,production cost $41,000 For Machine D, selling price $370,000, procuction cost $150,000 during the year; the totail revenue from the sale of these machines wit be reported in the income statement for the yearc. Machines B and D cost incurred so far for these two machines is $240.000. The revenue from the sale of these tso machines will not be reported in the income statement for the year, Using the transaction approach (the matching method), compute the company\'s income for the vear

Solution

Income for the year = (125000+72000)-(67000+41000) = $     89,000 Annual depreciation before change of estimate of useful life = 100000/20 = $       5,000 Accumulated depreciation as on December 31, 2012 = 5000*5 = $     25,000 Book value as on December 31, 2012 = 100000-25000 = $     75,000 Balance of useful life = 30-5 = 25 years Revised annual depreciation = 75000/25 = $       3,000 Depreciation for 2013 $       3,000