19.5 (LO 2) AP On April 22, 2020, Sandstone Enterprises purchased equipment for $129,200. The com-...
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19.5 (LO 2) AP On April 22, 2020, Sandstone Enterprises purchased equipment for $129,200. The com- pany expects to use the equipment for 12,000 working hours during its four-year life and that it will have a residual value of $14,000. Sandstone has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 1,900 hours in 2020; 2,800 hours in 2021; 3,700 hours in 2022; 2,700 hours in 2023; and 1,100 hours in 2024. Instructions a. Prepare a depreciation schedule for the life of the asset under each of the following methods: 1. straight-line, 2. double diminishing-balance, and 3. units-of-production. b. Which method results in the lowest profit over the life of the asset? c. Which method results in the least cash used for depreciation over the life of the asset? Prepare depreciation schedules and answer questions. 19.5 (LO 2) AP On April 22, 2020, Sandstone Enterprises purchased equipment for $129,200. The com- pany expects to use the equipment for 12,000 working hours during its four-year life and that it will have a residual value of $14,000. Sandstone has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 1,900 hours in 2020; 2,800 hours in 2021; 3,700 hours in 2022; 2,700 hours in 2023; and 1,100 hours in 2024. Instructions a. Prepare a depreciation schedule for the life of the asset under each of the following methods: 1. straight-line, 2. double diminishing-balance, and 3. units-of-production. b. Which method results in the lowest profit over the life of the asset? c. Which method results in the least cash used for depreciation over the life of the asset? Prepare depreciation schedules and answer questions.
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