Exercise 11-27 L01 Computation of Depreciation Expense Limestone Construction purchased a concrete mixer on July 15,...
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Exercise 11-27 L01 Computation of Depreciation Expense Limestone Construction purchased a concrete mixer on July 15, 2013. Company officials revealed the following information regarding this asset and its acquisition: Purchase price Residual value Estimated useful life. Estimated service hours Estimated production in units $196,000 $20,000 9 years 50,000 375,000 yards The concrete mixer was operated by construction crews in 2013 for a total of 6,500 hours, and it produced 49,500 yards of concrete. It is company policy to take a half-year's depreciation on all assets for which it used the straight-line or double-declining-balance depreciation method in the year of purchase. Calculate the resulting depreciation expense for 2013 under each of the following methods, and specify which method allows the greatest depreciation expense. 1. Double-declining-balance 2. Productive-output 3. Service-hours 4. Straight-line Exercise 11-27 L01 Computation of Depreciation Expense Limestone Construction purchased a concrete mixer on July 15, 2013. Company officials revealed the following information regarding this asset and its acquisition: Purchase price Residual value Estimated useful life. Estimated service hours Estimated production in units $196,000 $20,000 9 years 50,000 375,000 yards The concrete mixer was operated by construction crews in 2013 for a total of 6,500 hours, and it produced 49,500 yards of concrete. It is company policy to take a half-year's depreciation on all assets for which it used the straight-line or double-declining-balance depreciation method in the year of purchase. Calculate the resulting depreciation expense for 2013 under each of the following methods, and specify which method allows the greatest depreciation expense. 1. Double-declining-balance 2. Productive-output 3. Service-hours 4. Straight-line
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