Question
Nature Power Company uses the composite method and straight-line depreciation for its power plant equipment. Its Apple River plant, which began generating electricity January 1,
Nature Power Company uses the composite method and straight-line depreciation for its power plant equipment. Its Apple River plant, which began generating electricity January 1, 2021, had the following equipment:
| Equipment | Life (Years) | Estimated Cost | Residual Value | ||||
| Turbines | 25 | $ | 4,500,000 | $ | 500,000 | ||
| Steam pipes | 15 | 3,000,000 | 300,000 | ||||
| Furnace | 20 | 6,000,000 | 0 | ||||
Required: 1. Compute the composite depreciation rate. (Round your answer to 2 decimal places.) 2. Compute the average service life. (Round your answer to 1 decimal place.) 3. Compute 2021 depreciation.
1.Composite depreciation rate. %
2.Average service life years
3.Depreciation
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
8th edition
978-1259569197
