Here is the problem: Dordine Company acquired equipment on March 1, 2020, at a cash cost of $1,000,000. Transportation charges amounted to $12,000, installation cost was $40,000, testing costs were $30,000, and the payment of a fine for not getting the proper permit for moving the equipment was $1,000. The equipment was estimated to have a useful life of 12 years and a salvage value of $60,000 at the end of its life. It was further estimated that the equipment would be used in the production of $364,000 units of product during its life. During the 2020 year, 40,000 units of product were produced. Required: A. Prepare a schedule to calculate the original cost and the depreciable base of the asset. B. Compute the depreciation to the nearest dollar for the year ended December 31, 2020, using the straight-line method. C. Compute the depreciation to the nearest dollar for the year ended December 31, 2020, using the units- of-production method. D. Compute the depreciation to the nearest dollar for the year ended December 31, 2020, using the sum- of-the-years-digits method. E. Compute the depreciation to the nearest dollar for the year ended December 31, 2020, using the double-declining balance method. A Calculation of depreciable basis: Cash cost of asset Transportation cost Installation cost Testing costs Total acquisition cost Less salvage value Basis for depreciation B Straight-line method: Depreciable base Number of years Annual depreciation Portion of the year First year depreciation expense C Units-of-production method: 6 C 7 8 9 0 Units-of-production method: Calculation of cost per unit: Depreciation base Total number of units Total cost per unit Number of units produced in year 1 First year depreciation expense 1 2. 3 4 4 5 LO 6 OP Sum-of-the-years-digits method: SYD ratio numerator 7 E9 SYD ratio denominator SYD ratio for first year CM 14 15 16 Depreciable base SYD ratio for first year First year annual depreciation amount Portion of the year First year depreciation expense LE ET 54 36 Sum-of-the-years-digits method: SYD ratio numerator 38 39 SYD ratio denominator SYD ratio for first year 10 11 13 A 15 16 17 Depreciable base SYD ratio for first year First year annual depreciation amount Portion of the year First year depreciation expense 6 18 19 50 1 2 E SNS Double-declining balance method: Beginning of year book value Twice the straight-line rate Annual depreciation Portion of the year First year depreciation expense 4 EN