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Sunland Company purchased equipment on March 27, 2018, at a cost of $284,000. Management is contemplating the merits of using the diminishing-balance or units-of-production method

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Sunland Company purchased equipment on March 27, 2018, at a cost of $284,000. Management is contemplating 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 $4,000 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 2018, 20,200 units in 2019; 19,800 units in 2020; 20,000 units in 2021; and 5,000 units in 2022. Sunland has a December year end. A) Prepare a depreciation schedules for the life of the equipment using Straight line method Carrying Value Depreciation Expense Accumulated Depreciation Carrying Value End of year 2018 2019 2020 2021 2022 b) Prepare a depreciation schedules for the life of the equipment using units of production Carrying Value Depreciation Expense Accumulated Depreciation Carrying Value End of 2018 2019 2020 2021 2022 c) Prepare a depreciation schedules for the life of the equipment using Double-diminishing-balance method Carrying Value Depreciation Expense Accumulated Depreciation Carrying Value End of year 2018 2019 1,011 b) Prepare a depreciation schedules for the life of the equipment using units of production Carrying Depreciation Expense Accumulated Depreciation Carrying Value End of year Value 2018 2019 2020 2021 2022 c) Prepare a depreciation schedules for the life of the equipment using Double-diminishing-balance method Carrying Value Depreciation Expense Accumulated Depreciation Carrying Value End of year 2018 2019 2020 2021 2022

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