Brenan, Inc. purchased equipment at the beginning of 2004 for $1,520,000. Brenan

Question

Brenan, Inc. purchased equipment at the beginning of 2004 for $1,520,000. Brenan. The equipment has an estimated residual value (salvage value) of $20,000 and an estimated life of 5 years or 100,000 hours of operation. The machinery was operated for 15,000 hours in 2004, 20,000 hours in 2005, 35,000 hours in 2006, 20,000 hours in 2007, and 10,000 hours in 2008.....Create a depreciation schedule for Straight-line depreciation method ....Cost ..Book Value (beginning) ..Depreciation Expense ..Accumulated Depreciation ..Book Value (ending)

Explanation / Answer

2004 Depreciation=$300000 Cost Book Value(Beginning)=$15,20000 .Accumulated Depreciation =$300000 Book Value (ending) =$12,20000 2005 Depreciation=$300000 Cost Book Value(Beginning)=$12,20000 .Accumulated Depreciation =$600000 Book Value (ending) =$9,20000 2006 Depreciation=$300000 Cost Book Value(Beginning)=$9,20000 .Accumulated Depreciation =$900000 Book Value (ending) =$6,20000 2007 Depreciation=$300000 Cost Book Value(Beginning)=$6,20000 .Accumulated Depreciation =$12,00000 Book Value (ending) =$3,20000 2008 Depreciation=$300000 Cost Book Value(Beginning)=$3,20000 .Accumulated Depreciation =$15,00000 Book Value (ending) =$20000(Salvage value)

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