P11-2 (Depreciation for Partial Periods (Depreciation for Partial Periods-SL, Ac
ID: 2376871 • Letter: P
Question
P11-2 (Depreciation for Partial Periods
(Depreciation for Partial Periods-SL, Act., SYD, and DDB) The cost of equipment purchased by Charleston, Inc., on June 1, 2012, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years; its total working hours are estimated at 42,000; and its total production is estimated at 525,000 units. During 2012, the machine was operated 6,000 hours and produced 55,000 units. During 2013, the machine was operated 5,500 hours and produced 48,000 units. Compute depreciation expense on the machine for the year ending December 31, 2012, and the year ending December 31, 2013, using the following methods. Straight-line. Units-of-output. Working hours. Sum-of-the-years'-digits. Declining-balance (twice the straight-line rate).Explanation / Answer
Straight-line.
2010 $ 7000
2011 $ 12000
Units-of-output.
2010 $ 8800
2011 $ 7680
Working hours.
2010 $ 12000
2011 $ 11000
Sum-of-the-years'-digits.
2010 $ 12250
2011 $ 19250
Declining balance (twice the straight-line rate).
2010 $ 14833
2011 $ 21190
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