Question
Correct my answer thanks Straight-Line and Units-of-Production Methods Assume that Sample Company purchased factory equipment on January 1, 2016, for $85,000. The equipment has an
Correct my answer thanks
Straight-Line and Units-of-Production Methods
Assume that Sample Company purchased factory equipment on January 1, 2016, for $85,000. The equipment has an estimated life of five years and an estimated residual value of $8,500. Sample's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2016, but production subsequent to 2016 will increase by 10,000 units each year.
Required:
1. Calculate the depreciation expense, accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life. Enter all amounts as positive values.
Straight-line method: Annual Year Depreciation 2016 $85,000 X 201769 2018 2019 2020 Units-of-production method: Accumulated Depreciation 15,300 V 15,300X 15,300X 15,300X 15,300X Book Value 15,300X 30,600X 45,900X 61,200X 76,500X 69,700X 54,400X 39,100X 23,800X Annual Year Depreciation 2016 2017 10,200V 2018 15,300 2019 20,400 2020 25,500 2. In this exercise, The units of production method results in a depreciation pattern opposite to which depreciation Accumulated Depreciation 5,100 | 15,300 V 30,600 V Book Value 85,000X 79,900X 69,700X 54,400X 28,900X 5,100 | 51,000 76,500 V method? Accelerated depreciation method ??WindowsStep by Step Solution
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