Question #1 Equipment had a cost $216,000 and an economic life of 3 years with a salvage value of $6,000. This equipment had an expected output of 105,000 units – 35,000 units in Year 1, 40,000 units in Year 2 and 30,000 units in Year 3. Complete the following table: Year 3 Year Method Depreciation Expense Ending Book Value Straight Line Double Declining Balance Units of Production

Question #1 Equipment had a cost $216,000 and an economic life of 3 years with a salvage value of $6,000. This equipment had an expected output of 105,000 units – 35,000 units in Year 1, 40,000 units in Year 2 and 30,000 units in Year 3. Complete the following table: Year 3 Year Method Depreciation Expense Ending Book Value Straight Line Double Declining Balance Units of Production

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Description: Question #1Equipment had a cost $216,000 and an economic life of 3 years with a salvage value of$6,000. This equipment had an expected output of 105,000 units – 35,000 units in Year1, 40,000 units in Year 2 and 30,000 units in Year 3. Complete the f

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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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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