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On January 2, Manning Co. purchases and installs a new machine costing $324,000 with a five-...

On January 2, Manning Co. purchases and installs a new machine costing $324,000 with a five- year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in 1st year; 320,400 in 2nd year; 317,000 in 3rd year; 343,600 in 4th year; 138,500 in 5th year. The total number of units produced by the end of year 5 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)

  1. pepare a table in Excel or on paper with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (30 points)

  2. Assume that the machine is sold at the end of year 3. Using the straight line method calculations, prepare the journal entry to record the sale given the following separate situations: (18 points)

    1. The machine was sold for $150,000.

    2. The machine was sold for $140,000

    3. The machine was sold for $147,600.

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