Describe the purchase of an item of Property, Plant and Equipment so that your peers can determine depreciation for that first year using both the Straight-Line Method and the Units of Activity Method.  Then describe the sale of that item at the end of it's life so that your peers can determine if there was a gain or loss on disposal. Note please see below as I have included some examples. The information and amounts can be made up but it needs to follow the guidelines above.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Describe the purchase of an item of Property, Plant and Equipment so that your peers can determine depreciation for that first year using both the Straight-Line Method and the Units of Activity Method.  Then describe the sale of that item at the end of it's life so that your peers can determine if there was a gain or loss on disposal. Note please see below as I have included some examples. The information and amounts can be made up but it needs to follow the guidelines above.

 

 

 
A+ lawncare- The asset purchased is machinery at $10,000 in the year 2015, and
has a salvage value of $1,00O. The useful life of this piece of equipment is 5 years.
(straight line method)
The depreciable cost is $10,000, and the number of units of activity is 3,000 units.
(units of activity method)
2015 2,000 hours used
2016 2,500 hours used
2017 3,000 hours used
2018 3,200 hours used
2019 3,400 hours used
The machine sold for $15,000 at the end of its useful life of 5 years.
Transcribed Image Text:A+ lawncare- The asset purchased is machinery at $10,000 in the year 2015, and has a salvage value of $1,00O. The useful life of this piece of equipment is 5 years. (straight line method) The depreciable cost is $10,000, and the number of units of activity is 3,000 units. (units of activity method) 2015 2,000 hours used 2016 2,500 hours used 2017 3,000 hours used 2018 3,200 hours used 2019 3,400 hours used The machine sold for $15,000 at the end of its useful life of 5 years.
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