Question
Mace Company acquired equipment that cost $36,000, which will be depreciated on the assumption that the equipment will last six years and have a $2,400
Mace Company acquired equipment that cost $36,000, which will be depreciated on the assumption that the equipment will last six years and have a $2,400 residual value. Component parts are not significant and need not be recognized and depreciated separately. Several possible methods of depreciation are under consideration. Required: 1. Prepare an amortization schedule for each of the six years, assuming the following (Round your answer to nearest whole dollar.):
- Declining-balance method, using a rate of 30%.
- Productive-output method. Estimated output is a total of 210,000 units, of which 24,000 will be produced the first year 36,000 in each of the next two years 30,000 the fourth year and 42,000 the fifth and sixth years.
- Straight-line method.
2. Repeat your calculations for requirement 1, assuming a useful life of 10 years, and a declining-balance rate of 20% that reflects the longer life, but the same number of units of production. Assume no production in years 7 to 10. The residual value is unchanged. Prepare both requirements in an excel worksheet where excel calculations are used extensively.
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