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Please answer those that are blank as I got them wrong, please explain how they are calculated. Sunland Company purchased equipment on March 31, 2021,
Please answer those that are blank as I got them wrong, please explain how they are calculated.
Sunland Company purchased equipment on March 31, 2021, at a cost of $256,000. Management is considering the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $8,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 15,000 units in 2021; 20,600 units in 2022; 19,400 units in 2023; 20,000 units in 2024; and 5,000 units in 2025. Sunland has a December 31 year end. Straight-line method: Depreciable Amount Depreciation Expense Accumulated Depreciation Carrying Amount Year $ 2021 $ 46500 LA 46500 209500 2022 62000 108500 147500 2023 62000 170500 85500 2024 62000 232500 23500 2025 15500 248000 8000 Double-diminishing-balance method: Opening Carrying Amount Depreciation Expense Accumulated Depreciation Carrying Amount Year $ 2021 $ 256000 $ $ 2022 2023 2024 2025 248000 8000Step by Step Solution
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