need step by step solution showing work 11-63 During the construction of a highw

Question

need step by step solution showing work

11-63 During the construction of a highway bypass, earth- moving equipment costing $40,000 was purchased for use in transporting fill from the borrow pit. At the end of the 4-year project, the equipment will be sold for $20,000. The schedule for moving fill calls for a total of 100,000 cubic feet during the project. In the first year, 40% of the total fill is required; in the second year, 30%, in the third year, 25%; and in the final year, the remaining 5%. Determine the units-of-production depreciation schedule for the

Explanation / Answer

Depreciation rate = (40000-20000)/100000 = 0.20 per cubic feet

Year Unit of production Depreciation rate Depreciation expense 1 40000 0.20 8000 2 30000 0.20 6000 3 25000 0.20 5000 4 5000 0.20 1000 Total 20000

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