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In 2001, Fund Company purchased three pieces of equipment. The equipment is used for different...

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Accounting

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In 2001, Fund Company purchased three pieces of equipment. The equipment is used for different purposes and hence different methods of amortization have been selected. Information concerning the equipment is summarized below: For the declining balance method, Fund Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000 hours. Actual hours of use in the first three yoars were: 2001,1,500;2002,4,800; and 2003,6,000. Instructions (a) Calculate the amount of accumulated amortization on each machine at December 31, 2003. (Round your answer to the nearest dollar.) (b) Early in 2003, the company reviews the remaining useful life and residual values for the machines. The useful life for Machine 1 is now expected to be a total of eight years. The residual value of machine 2 is revised to $20,000 and the total machine hours for Machine 3 is revised to 40,000 . What would be the amortization expense for the machines in 2003 ? (Hint: you have to calculate the balance left to be amortized and the remaining useful life; e.g., for machine 3 the number of hours expected excluding the first two years.) (Round your answer to the nearest dollar.)

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