Culver Automotive purchased equipment on October 1, 2024, at a total cost of $182,000. The machine has an estimated useful eight years or 100,000 hours, and an estimated residual value of $42,000. During 2024 and 2025, the machinery was used 6,300 14,700 hours, respectively. Calculate depreciation expense at December 31, 2024 and December 31, 2025, under the following depreciation methods: (Rou answers to O decimal places, e.g. 5,275. and Round Depreciation cost per unit to 1 decimal places, e.g. 527.5) Straight-line depreciation Units-of-production depreciation $ $ Double diminishing-balance depreciation $ 2024 $ $ +A $ 2025

Culver Automotive purchased equipment on October 1, 2024, at a total cost of $182,000. The machine has an estimated useful eight years or 100,000 hours, and an estimated residual value of $42,000. During 2024 and 2025, the machinery was used 6,300 14,700 hours, respectively. Calculate depreciation expense at December 31, 2024 and December 31, 2025, under the following depreciation methods: (Rou answers to O decimal places, e.g. 5,275. and Round Depreciation cost per unit to 1 decimal places, e.g. 527.5) Straight-line depreciation Units-of-production depreciation $ $ Double diminishing-balance depreciation $ 2024 $ $ +A $ 2025

Name: Culver Automotive purchased equipment on October 1, 2024, at a total
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Description: Culver Automotive purchased equipment on October 1, 2024, at a total cost of $182,000. The machine has an estimated useful life ofeight years or 100,000 hours, and an estimated residual value of $42,000. During 2024 and 2025, the machinery was used

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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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Question

Culver Automotive purchased equipment on October 1, 2024, at a total cost of $182,000. The machine has an estimated useful life of
eight years or 100,000 hours, and an estimated residual value of $42,000. During 2024 and 2025, the machinery was used 6,300 and
14,700 hours, respectively.
Calculate depreciation expense at December 31, 2024 and December 31, 2025, under the following depreciation methods: (Round
answers to 0 decimal places, e.g. 5,275. and Round Depreciation cost per unit to 1 decimal places, e.g. 527.5)
Straight-line depreciation
Units-of-production depreciation
Double diminishing-balance depreciation
$
LA
$
LA
2024
$
LA
$
LA
2025

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