value: 8.00 points Calculate the amount of depreciation to report during the yea

Question

value: 8.00 points Calculate the amount of depreciation to report during the year ended December 31 for equipment that was purchased at a cost of $75,000 on October 1. The equipment has an estimated residual value of $3,000 and an estimated useful life of five years or 20,000 hours. Assume the equipment was used for 1,000 hours from October 1 to December 31 and the company uses (a) straight-line, (b) double-declining-balance, or (c) units-of-production depreciation. (Do not round intermediate calculations.) Depreciation (a) Straight-Line (b) Double-Declining-Balance (c) Units-of-Production

Explanation / Answer

Staright line depreciation = (75000 - 3000) / 5 * 3/12 = 3600

Double declining depreciation = 75000 * (1 / 5) * 3/12 = 3750

Units of production depreciation = 75000 * 1000 / 20000 = 3750

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