Pebble Company acquired equipment on June 1, 2015, for $236,000. It is a calenda
ID: 2486044 • Letter: P
Question
Pebble Company acquired equipment on June 1, 2015, for $236,000. It is a calendar year-end company. The equipment has an estimated useful life of five years and an estimated residual value of $6,000. Calculate depreciation expense and complete the schedule presented below. The equipment is estimated to produce 125,000 units during its useful life. During the fiscal years 2015, 2016, 2017, 2018, 2019, 2020, and 2021, the equipment produced 18,000, 35,000, 30,000, 20,000, 10,000, 8,000, and 4,000 units respectively. Round to the nearest whole dollar where necessary. Be sure to include all calculations on a separate schedule.
Depreciation Calculations
Depreciation Method
Category
2015
2016
2017
2018
2019
2020
Straight line
Depreciation expense
Accumulated depreciation
Book value
Double declining balance
Depreciation expense
Accumulated depreciation
Book value
Units of production
Depreciation expense
Accumulated depreciation
Book value
Depreciation Method
Category
2015
2016
2017
2018
2019
2020
Straight line
Depreciation expense
Accumulated depreciation
Book value
Double declining balance
Depreciation expense
Accumulated depreciation
Book value
Units of production
Depreciation expense
Accumulated depreciation
Book value
Explanation / Answer
Straight line =+(236000-6000)/5 23000 Double declining balance 1/5 *2 40.00% Units of production (236000-6000)/125000 1.84 Per Unit Produced Depreciation Method Category 2015 2016 2017 2018 2019 2020 Straight line Depreciation expense 23000 46000 46000 46000 46000 23000 Accumulated depreciation 23000 69000 115000 161000 207000 230000 Book value 213000 167000 121000 75000 29000 6000 Double declining balance Depreciation expense 47200 75520 45312 27187 16312 18468 Accumulated depreciation 47200 122720 168032 195219 211532 230000 Book value 188800 113280 67968 40780.8 24468 6000 Units of production Depreciation expense 33120 64400 55200 36800 18400 14720 Accumulated depreciation 33120 97520 152720 189520 207920 222640 Book value 202880 138480 83280 46480 28080 13360
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