Question
Crane Company purchased equipment on account on September 3, 2019, at an invoice price of $203,000. On September 4, 2019, it paid $5,600 for delivery
Crane Company purchased equipment on account on September 3, 2019, at an invoice price of $203,000. On September 4, 2019, it paid $5,600 for delivery of the equipment. A one-year, $2,010 insurance policy on the equipment was purchased on September 6, 2019. On September 20, 2019, Crane paid $2,400 for installation and testing of the equipment. The equipment was ready for use on October 1, 2019. Crane estimates that the equipment's useful life will be four years, with a residual value of $17,500. It also estimates that, in terms of activity, the equipment's useful life will be 96,750 units. Crane has a September 30 fiscal year end. Assume that actual usage is as follows:
# of Units Year Ended September 30 15,630 2020
23,930 2021
20,230 2022
37,860 2023
Cost of equipment | $ 211,000 |
1.) Prepare depreciation schedules for the life of the asset under the following depreciation methods:
1. | straight-line | |
2. | double diminishing-balance | |
3. | units-of-production |
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