An item of equipment purchased on the first day of the fiscal year for $50,000 h

Question

An item of equipment purchased on the first day of the fiscal year for $50,000 has an estimated life of 5 years or 1500 production hours and an estimated scrap value of $5,000. Compute the annual deprecation for each of the five years using the three methods of depreciation. (For the units of production method, assume that during the first three years the equipment was used for 400 production hours each year and that during the 4thand 5thyears the equipment was used for 150 production hours per year.)

Calculate the depreciation for the first two years for the equipment in your answer above, but assume the purchase date on July 10 rather than Jan. 1. (Use the straight line and declining balance methods only.)

Explanation / Answer

As per Chegg Guidelines we answer one question per post. I have answered more than 1 question. Kindly post remaining questions in separate post to get the best answers SLM Cost of Machine              50,000.00 Salvage Value                5,000.00 Life in years                         5.00 Particulars 1 2 3 4 5 Opening Balance              50,000.00            41,000.00            32,000.00            23,000.00            14,000.00 Depreciation(50,000-5,000)/5                9,000.00              9,000.00              9,000.00              9,000.00              9,000.00 Closing balance              41,000.00            32,000.00            23,000.00            14,000.00              5,000.00 Life   5 Years Double decling balance method rate = 20%*2 40% Particulars 1 2 3 4 5 Opening Balance              50,000.00            30,000.00            18,000.00            10,800.00              6,480.00 Depreciation@40%              20,000.00            12,000.00              7,200.00              4,320.00              1,480.00 Closing balance              30,000.00            18,000.00            10,800.00              6,480.00              5,000.00 Units of production Cost of Machine              50,000.00 Salvage Value                5,000.00 Life in hours                1,500.00 Particulars 1 2 3 4 5 Opening Balance              50,000.00            38,000.00            26,000.00            14,000.00              9,500.00 Units of production                    400.00                  400.00                  400.00                  150.00                  150.00 Depreciation(Units/1,500)*45,000              12,000.00            12,000.00            12,000.00              4,500.00              4,500.00 Closing balance              38,000.00            26,000.00            14,000.00              9,500.00              5,000.00

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