The cost of equipment purchased by Skysong, Inc., on June 1, 2025, is $107,100. It is estimated that the machine will have a $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimate and its total production is estimated at 630,000 units. During 2025, the machine was operated 6,420 hours and produced 58,850 units. During 2026, the machine was operated 5,885 hours and produced 51,300 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e. a. b. C. Straight-line Units-of-output Working hours d. Sum-of-the-years'-digits $ $ $ $ 2025 $ $ $ $ 2026
The cost of equipment purchased by Skysong, Inc., on June 1, 2025, is $107,100. It is estimated that the machine will have a $6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimate and its total production is estimated at 630,000 units. During 2025, the machine was operated 6,420 hours and produced 58,850 units. During 2026, the machine was operated 5,885 hours and produced 51,300 units. Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e. a. b. C. Straight-line Units-of-output Working hours d. Sum-of-the-years'-digits $ $ $ $ 2025 $ $ $ $ 2026
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:The cost of equipment purchased by Skysong, Inc., on June 1, 2025, is $107,100. It is estimated that the machine will have a
$6,300 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 50,400,
and its total production is estimated at 630,000 units. During 2025, the machine was operated 6,420 hours and
produced 58,850 units. During 2026, the machine was operated 5,885 hours and produced 51,300 units.
Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026,
using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892.)
a.
b.
C.
Straight-line
e.
Units-of-output
Working hours
d. Sum-of-the-years'-digits
$
$
$
$
Double-declining-balance $
2025
$
$
$
tA
$
$
2026
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