On October 1, 2021, the Allegheny Corporation purchased equipment for $278,000. The estimated service life of the equipment is 10 years and the estimated residual value is $3,000. The equipment is expected to produce 550,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. Exercise 11-3 (Algo) Part 3 3. Units of production (units produced in 2021, 25,000; units produced in 2022, 40,000). (Round "Depreciation per unit rate" answers o 2 decimal places.) Select formula for Units of Production Depreciation: Calculate 2021 depreciation expense: Depreciation per unit rate Units produced in 2021 Depreciation in 2021 Calculate 2022 depreciation expense: Depreciation per unit rate Units produced in 2022 Depreciation in 2022
On October 1, 2021, the Allegheny Corporation purchased equipment for $278,000. The estimated service life of the equipment is 10 years and the estimated residual value is $3,000. The equipment is expected to produce 550,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. Exercise 11-3 (Algo) Part 3 3. Units of production (units produced in 2021, 25,000; units produced in 2022, 40,000). (Round "Depreciation per unit rate" answers o 2 decimal places.) Select formula for Units of Production Depreciation: Calculate 2021 depreciation expense: Depreciation per unit rate Units produced in 2021 Depreciation in 2021 Calculate 2022 depreciation expense: Depreciation per unit rate Units produced in 2022 Depreciation in 2022
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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![Required Information
Exercise 11-3 (Algo) Depreciation methods partial periods [LO11-2]
[The following information applies to the questions displayed below.]
On October 1, 2021, the Allegheny Corporation purchased equipment for $278,000. The estimated service life of the
equipment is 10 years and the estimated residual value is $3,000. The equipment is expected to produce 550,000 units
during its life.
Required:
Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated
based on the number of months the asset is in service.
Exercise 11-3 (Algo) Part 3
3. Units of production (units produced in 2021, 25,000; units produced in 2022, 40,000). (Round "Depreciation per unit rate" answers
to 2 decimal places.)
Select formula for Units of Production Depreciation:
Calculate 2021 depreciation expense:
Depreciation per unit rate
Units produced in 2021
Depreciation in 2021
Calculate 2022 depreciation expense:
Depreciation per unit rate
Units produced in 2022
Depreciation in 2022](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05c29da8-5e07-472c-a295-a56e55cdcfad%2F387d4a95-5122-4c40-90c1-b44061c95f99%2Fw4l65rp_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
Exercise 11-3 (Algo) Depreciation methods partial periods [LO11-2]
[The following information applies to the questions displayed below.]
On October 1, 2021, the Allegheny Corporation purchased equipment for $278,000. The estimated service life of the
equipment is 10 years and the estimated residual value is $3,000. The equipment is expected to produce 550,000 units
during its life.
Required:
Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated
based on the number of months the asset is in service.
Exercise 11-3 (Algo) Part 3
3. Units of production (units produced in 2021, 25,000; units produced in 2022, 40,000). (Round "Depreciation per unit rate" answers
to 2 decimal places.)
Select formula for Units of Production Depreciation:
Calculate 2021 depreciation expense:
Depreciation per unit rate
Units produced in 2021
Depreciation in 2021
Calculate 2022 depreciation expense:
Depreciation per unit rate
Units produced in 2022
Depreciation in 2022
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