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Quick Producers acquired factory equipment on January 1, 2020, costing $39,000. In view of pending technolog- ical developments, it is estimated that the machine will
Quick Producers acquired factory equipment on January 1, 2020, costing $39,000. In view of pending technolog- ical developments, it is estimated that the machine will have a resale value upon disposal in four years of $8,000 and that disposal costs will be $500. Data relating to the equipment follow. Estimated Service Life Actual Service Hours Years .......................... Service hours ..... .. 20,000 Calendar Year 2020.. 2021 ..... 2022 2023.. 5,700 5,000 4,800 4,400 Required a. Prepare a depreciation schedule (for 2020 through 2023) that shows annual depreciation expense, accumu- lated depreciation, and book value, using the units-of-production method with service hours as a measure of input assuming accounts are closed each December 31. b. Compute depreciation expense for the first and second years assuming (1) straight-line, (2) sum-of-the- years-digits, and (3) double-declining-balance depreciation
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