Oriole Company purchased equipment on account on September 3, 2019, at an invoice price of $195,000. On September 4, 2019, it paid $4,800 for delivery of the equipment. A one-year, $1,970 insurance policy on the equipment was purchased on September 6, 2019. On September 20, 2019, Oriole paid $3,200 for installation and testing of the equipment. The equipment was ready for use on October 1, 2019. Oriole estimates that the equipment's useful life will be four years, with a residual value of $13,500. It also estimates that, in terms of activity, the equipment's useful life will be 94,750 units. Oriole has a September 30 fiscal year end. Assume that actual usage is as follows: Year Ended September 30 # of Units 15,550 2020 23,850 2021 20,150 2022 36,100 2023 1. STRAIGHT-LINE
Oriole Company purchased equipment on account on September 3, 2019, at an invoice price of $195,000. On September 4, 2019, it paid $4,800 for delivery of the equipment. A one-year, $1,970 insurance policy on the equipment was purchased on September 6, 2019. On September 20, 2019, Oriole paid $3,200 for installation and testing of the equipment. The equipment was ready for use on October 1, 2019. Oriole estimates that the equipment's useful life will be four years, with a residual value of $13,500. It also estimates that, in terms of activity, the equipment's useful life will be 94,750 units. Oriole has a September 30 fiscal year end. Assume that actual usage is as follows: Year Ended September 30 # of Units 15,550 2020 23,850 2021 20,150 2022 36,100 2023 1. STRAIGHT-LINE
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Oriole Company purchased equipment on
account on September 3, 2019, at an
invoice price of $195,000. On September 4,
2019, it paid $4,800 for delivery of the
equipment. A one-year, $1,970 insurance
policy on the equipment was purchased on
September 6, 2019. On September 20,
2019, Oriole paid $3,200 for installation
and testing of the equipment. The
equipment was ready for use on October 1,
2019.
Oriole estimates that the equipment's
useful life will be four years, with a residual
value of $13,500. It also estimates that, in
terms of activity, the equipment's useful life
will be 94,750 units. Oriole has a
September 30 fiscal year end. Assume that
actual usage is as follows:
# of Units Year Ended September 30
15,550 2020
23,850 2021
20,150 2022
36,100 2023
1. STRAIGHT-LINE
2. DOUBLE DIMINISHING BALANCE
3. UNITS OF PRODUCTION
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