Computing Depreciation Under Alternative Methods Equipment costing $130,000 is expected to have a residual value of $10,000 at the end of its six-year useful life. The equipment is metered so that the number of units processed is courted. The equipment a designed to process 1,000,000 units in its lifetime. In Year 1 and Year 2, the equipment processed 180.000 units and 140,000 units respectively Calculate the depreciation expense for Year 1 and Year 2 using of the following methods a Straight-line (Round to nearest dollar) Year 1 Year 2 S 20,000 20.000 b. Double-declining balance (Round to nearest dollar) Year 11 41329 W Year 21 28.601 c Units of production (Round to nearest dollar) 21,400 16.800
Computing Depreciation Under Alternative Methods Equipment costing $130,000 is expected to have a residual value of $10,000 at the end of its six-year useful life. The equipment is metered so that the number of units processed is courted. The equipment a designed to process 1,000,000 units in its lifetime. In Year 1 and Year 2, the equipment processed 180.000 units and 140,000 units respectively Calculate the depreciation expense for Year 1 and Year 2 using of the following methods a Straight-line (Round to nearest dollar) Year 1 Year 2 S 20,000 20.000 b. Double-declining balance (Round to nearest dollar) Year 11 41329 W Year 21 28.601 c Units of production (Round to nearest dollar) 21,400 16.800
Chapter1: Financial Statements And Business Decisions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Computing Depreciation Under Alternative Methods
Equipment costing $130,000 is expected to have a residual value of $10,000 at the end of its six-year useful life. The equipment is metered so that the number of units processed is counted. The equipment
designed to process 1,000,000 units in its lifetime. In Year 1 and Year 2, the equipment processed 180.000 units and 140,000 units respectively Calculate the depreciation expense for Year 1 and Year 2 using each
of the following methods
a Straight-line (Round to nearest dollar)
Year 11
Year 25
20,000 ✓
20.000
b. Double-declining balance (Round to nearest dollar)
Year 11 43.329 M
20,001
c Units of production (Round to nearest dollar)
Yer 11
21,400
Year 2 s
16.800
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