Kurtis Koal Company Inc purchased a new mining

machine at #3077
Kurtis Koal Company, Inc. purchased a new mining machine at a total cost of $ 900,000 on the
first day of its fiscal year. The firm estimates that the machine has a useful life of six years or
6,000,000 tons of coal and a residual value of $ 60,000 at the end of its useful life. The following
schedule indicates the actual number of tons of coal mined with the machine per year:Year
Tons of Coal1 …………………. 700,0002 …………………. 1,400,0003 …………………. 1,600,0004 ……
1,000,0005 …………………. 750,0006 …………………. 550,000Prepare the depreciation schedules for t
machine assuming that Kurtis Koal used the following methods (each case is independent): a.
Straight- line method b. Units- of- output method c. Double- declining balance method (Adjust
the depreciation expense in the last year to the necessary amount to arrive at an ending book
value equal to the scrap value.) d. Kurtis Koal sells the mining machine for $ 450,000 at the end
of year 3. What is the gain or loss on sale under each of the depreciation methods in parts ( a)–(
c) above?View Solution:
Kurtis Koal Company Inc purchased a new mining machine at

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