GWildhorse Company purchased equipment on account on September 3, 2022, at an invoice price of $190,000. On September 4, 2022,it paid $4,700 for delivery of the equipment. A one-year, $1.945 insurance policy on the equipment was purchased on September 6,on October 1, 20222022. On September 20, 2022, Wildhorse paid $3,300 for installation and testing of the equipment. The equipment was ready for useWildhorse estimates that the equipment's useful life will be four years, with a residual value of $13,000. It also estimates that, in termsas follows:of activity, the equipment's useful life will be 74,000 units. Wildhorse has a September 30 fiscal year end. Assume that actual usage is#of Units15,50023,80020.10015.500Year Ended September 302023202420252026 Prepare depreciation schedules for the life of the asset under the following depreciation methods:1. straight-line2.3.double diminishing-balance, assuming a rate of 50%units-of-production

Depreciation is reduction in the value of asset due to its use, wear or tear.Salvage value which is…

Answered: Prepare depreciation schedules for the…

Prepare depreciation schedules for the life of the asset under the following depreciation methods: 1. straight-line 2 3. double diminishing-balance, assuming a rate of 50% units-of-production

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

G
Wildhorse Company purchased equipment on account on September 3, 2022, at an invoice price of $190,000. On September 4, 2022,
it paid $4,700 for delivery of the equipment. A one-year, $1.945 insurance policy on the equipment was purchased on September 6,
on October 1, 2022
2022. On September 20, 2022, Wildhorse paid $3,300 for installation and testing of the equipment. The equipment was ready for use
Wildhorse estimates that the equipment's useful life will be four years, with a residual value of $13,000. It also estimates that, in terms
as follows:
of activity, the equipment's useful life will be 74,000 units. Wildhorse has a September 30 fiscal year end. Assume that actual usage is
#of Units
15,500
23,800
20.100
15.500
Year Ended September 30
2023
2024
2025
2026

Prepare depreciation schedules for the life of the asset under the following depreciation methods:
1. straight-line
2.
3.
double diminishing-balance, assuming a rate of 50%
units-of-production

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Step 2: Calculation of the cost of Equipment:

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Step 3: 1) Straight line method:

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Step 4: 2) Double Diminishing balance:

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Step 5: 3) Units of production method:

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