Machinery is purchased on July 1 of the current fiscal year…

Machinery is purchased on July 1 of the current fiscal year for $240,000. It is expected to have a useful life of four years, or 25,000 operating hours, and a residual value of $15,000. Compute the depreciation for the last six months of the current fiscal year ending December 31 by each of the following methods: a. Straight-line b. Double-declining-balance c. Units-of-activity (used for 1600 hours during the current year)

Wright Company sells merchandise with a one-year warranty. …

Wright Company sells merchandise with a one-year warranty.  In the current year, sales consisted of 2,000 units.  It is estimated that warranty repairs will average $15 per unit sold and 30% of the repairs will be made in the current year and 70% in the next year.  In the current year’s income statement, Wright should show warranty expense of