Question
The cost of equipment purchased by Charlie Town, Inc, on March 1, 2017, is $98,000. It is estimated the machine will have a $7,500 salvage
The cost of equipment purchased by Charlie Town, Inc, on March 1, 2017, is $98,000. It is estimated the machine will have a $7,500 salvage value at the end of its service life. Its service life is estimated to at 6 years, its total working hours at 36,000, and its total production at 390,000 units. The number of hours and units produced for the useful life of the asset were as follows: Year Hours Units 2017 4,200 55,000 2018 6,200 68,000 2019 6,000 75,000 2020 5,300 65,000 2021 6,400 70,000 2022 6,000 55,000 2023 2,000 - INSTRUCTIONS: Compute the depreciation expense for the years 2017-2023 using each of the following methods. (a) Straight-line (b) Sum of Years Digits (c) Two-and-a-half times declining balance (d) Units of production units (e) Units of production - hours (f) On June 30, 2023, Charlie Town, Inc sold the equipment for $10,000. They had been using the straight-line depreciation method. Record the journal entry to record the sale of the asset.
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