Equipment was purchased at the beginning of 2009 for $100,000 with an estimated product life of 300,000

Question:

Equipment was purchased at the beginning of 2009 for $100,000 with an estimated product life of 300,000 units. The estimated salvage value was $4,000. During 2009, 2010, and 2011, the equipment produced 80,000 units, 120,000 units, and 40,000 units, respectively. The machine was damaged at the beginning of 2012, and the equipment was scrapped with no salvage value.

1. Determine depreciation using the productive-output method for 2009, 2010, and 2011.

2. Give the entry to write off the equipment at the beginning of 2012.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...