Wenner Furnace Corp. purchased machinery for $524,520 on May 1, 2012. It is esti

Question

Wenner Furnace Corp. purchased machinery for $524,520 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $28,200, production of 451,200 units, and working hours of 25,000. During 2013, Wenner Corp. uses the machinery for 2,650 hours, and the machinery produces 47,940 units.

From the information given, compute the depreciation charge for 2013 under each of the following methods. (Round answers to 0 decimal places, e.g. $45,892.)

(a) Straight-line $ (b) Units-of-output $ (c) Working hours $ (d) Sum-of-the-years Wenner Furnace Corp. purchased machinery for $524,520 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $28,200, production of 451,200 units, and working hours of 25,000. During 2013, Wenner Corp. uses the machinery for 2,650 hours, and the machinery produces 47,940 units. From the information given, compute the depreciation charge for 2013 under each of the following methods. (Round answers to 0 decimal places, e.g. $45,892.)

Explanation / Answer

Depreciable amount = 524,520 -28,200=$496320

a) Straight-line = 496320/10 =$49632

b) Units pf output = 496320*47940/451,200=$52734

c) Working hours = 496320*2650/25000= $52610

d) Sum-of-the-years

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