Question
Sandhill Company purchased equipment on account on September 3, 2019, at an invoice price of $200,000. On September 4, 2019, it paid $5,300 for delivery
Sandhill Company purchased equipment on account on September 3, 2019, at an invoice price of $200,000. On September 4, 2019, it paid $5,300 for delivery of the equipment. A one-year, $1,995 insurance policy on the equipment was purchased on September 6, 2019. On September 20, 2019, Sandhill paid $2,700 for installation and testing of the equipment. The equipment was ready for use on October 1, 2019. Sandhill estimates that the equipment's useful life will be four years, with a residual value of $16,000. It also estimates that, in terms of activity, the equipment's useful life will be 76,800 units. Sandhill has a September 30 fiscal year end. Assume that actual usage is as follows:
# of Units | Year Ended September 30 | |
15,600 | 2020 | |
23,900 | 2021 | |
20,200 | 2022 | |
18,000 | 2023 |
Prepare depreciation schedules for the life of the asset under the following depreciation methods:
1. | straight-line | |
2. | double diminishing-balance | |
3. | units-of-production |
(Round depreciable amount per unit to 2 decimal places, e.g. 5.27 and the final answers to 0 decimal places, e.g. 5,276.)
I have already done number 1,please follow the table i have done below to do number 2 and 3 :
1. STRAIGHT-LINE DEPRECIATION
End of Year | |||||||||
Year | Depreciable Amount | Depr. Rate | = | Depr. Expense | Accum. Depr. | Carrying Amount | |||
2020 | $ | % | $ | $ | $ | ||||
2021 | % | ||||||||
2022 | % | ||||||||
2023 | % |
and also answer this question:Which method would result in the highest profit for the year ended September 30, 2021? Over the life of the asset?
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