Oxtongue Limited paid $135,000 to purchase equipment at the beginning of 2020. Oxtongue Limitedestimated the useful life of the equipment to be 4 years or 200,000 units. The equipment will beconsidered fully amortized when the balance in the Accumulated Depreciation account reaches $120,000. The equipment produced 52,000 units in 2023. Required Determine the estimated residual valueof the equipment. What is the depreciablecost of the equipment? 3. Calculate the depreciation expensefor 2023 under each of the following methods: a. straight-line b. units-of-production c. double-diminishing-balance

Given:Equipment purchased $135000Estimated useful life is 4 years or 200,000…

120,000. The equipment produced 52,000 units in 2023. Required Determine the estimated residual value of the equipment. What is the depreciablecost of the equipment? 3. Calculate the depreciation expense for 2023 under each of the following methods: a. straight-line b. units-of-production c. double- diminishing-balance

120,000. The equipment produced 52,000 units in 2023. Required Determine the estimated residual value of the equipment. What is the depreciablecost of the equipment? 3. Calculate the depreciation expense for 2023 under each of the following methods: a. straight-line b. units-of-production c. double- diminishing-balance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Oxtongue Limited paid $135,000 to purchase equipment at the beginning of 2020. Oxtongue Limited
estimated the useful life of the equipment to be 4 years or 200,000 units. The equipment will be
considered fully amortized when the balance in the Accumulated Depreciation account reaches $
120,000. The equipment produced 52,000 units in 2023. Required Determine the estimated residual value
of the equipment. What is the depreciablecost of the equipment? 3. Calculate the depreciation expense
for 2023 under each of the following methods: a. straight-line b. units-of-production c. double-
diminishing-balance

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Step 1: Calculation of depreciation

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Step 2: Residual value

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Step 3: Depreciable cost of equipment

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Step 4: Straight line method

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Step 5: Production method

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Step 6: Double-declining method

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