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On April 22, 2023, Cullumber Enterprises purchased equipment for $143,500. The company expects to use the equipment for 12,500 working hours during its four-year life
On April 22, 2023, Cullumber Enterprises purchased equipment for $143,500. The company expects to use the equipment for 12,500 working hours during its four-year life and that it will have a residual value of $13,500. Cullumber has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 2,000 hours in 2023; 3,000 hours in 2024; 3,600 hours in 2025; 2,700 hours in 2026; and 1,400 hours in 2027.
a) Prepare a depreciation schedule for the life of the asset under the straight-line method.
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