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ication) eBook B Show Me How Video Puntatem Straight-line and Units-of-Production Methods Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000.
ication) eBook B Show Me How Video Puntatem Straight-line and Units-of-Production Methods Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment has an estimated life of five years and an estimated residual value of $9,000. 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 2017, but production subsequent to 2017 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: Accumulated Book Annual Depreciation Year Depreciation Value S S $ 2017 16,200 7 16,200 73,800 2018 32,400 16,200 57,600 2019 48,600 16,200 41,400 2020 16,200 64,800 7 25,200 2021 16,200 9,000 81,000 Units-of-production method: Annual Accumulated Book Year Value Depreciation Depreciation $ S 2017 10,000 10,000 X X 10,000 2018 2019 2020 2021 2. In this exercise, The units of production method results in a depreciation pattern opposite to which depreciation method? Next Check My Work Items Save and Submit Assignment for Grading
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