Question
On September 1, 20 21 , Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and
On September 1, 2021, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and have a residual value of $4,000. During its eight-year life, the equipment is expected to produce 250,000 units of product. In 2021 and 2022, 42,000 and 76,000 units respectively were produced. Required: Compute depreciation expense under each of the following methods. Morrow is on a calendar-year basis ending December 31.
A) Straight-line for 2021
B) Sum-of-the-years' method for 2021
C) Double-declining balance method for 2022
D) Activity method (units of output) for 2021
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