At the beginning of 2015, your company buys a $28,000 piece of equipment that it

Question

At the beginning of 2015, your company buys a $28,000 piece of equipment that it expects to use for 4 years. The equipment has an estimated residual value of 2,000. The company expects to produce a total of 200,000 units. Actual production is as follows: 44,000 units in 2015, 52,000 units in 2016, 45,000 units in 2017, and 59,000 units in 2018. Required: a. Determine the depreciable cost. b. Calculate the depreciation expense per year under the straight-line method. c. Use the straight-line method to prepare a depreciation schedule. Year Value Aoquisition cost 2015 2016 2017 d. Calclate the depreciation rate per unit under the units-of-production method. (Round your answer to 2 decimal places.) e. Use the units-of-production method to prepare a depreciation schedule. (Do not round your Depreciation rate per unit.) Year Value Aoquisition cost 2015 2016 2017 2018

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Cost of equipment               28,000.00 Salvage Value                 2,000.00 Depreciable cost = 28000 - 2000               26,000.00 b) Depreciation expense = 26000/4                 6,500.00 c) Year Depreciation Expense Accumulated Depreciation Net Book Value Acquisition Cost         28,000.00 2015                 6,500.00                 6,500.00         21,500.00 2016                 6,500.00               13,000.00         15,000.00 2017                 6,500.00               19,500.00            8,500.00 2018                 6,500.00               26,000.00            2,000.00 d) Depreciation expense per unit = 26000/200,000                     0.1300 e) Year No of units Depreciation Expense Accumulated Depreciation Net Book Value Acquisition Cost         28,000.00 2015               44,000.00                 5,720.00            5,720.00         22,280.00 2016               52,000.00                 6,760.00         12,480.00         15,520.00 2017               45,000.00                 5,850.00         18,330.00            9,670.00 2018               59,000.00                 7,670.00         26,000.00            2,000.00

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