useful life,

Southern

estimates that its residual value will be

$6,000.

The equipment operated for

480

hours the first year,

1,440

hours the second year,

1,920

hours the third year, and

960

hours the fourth year. Read the requirements

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Requirement 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciationmethods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared.

Begin by preparing a depreciation schedule using the straight-line method.

Straight-Line Depreciation Schedule
		Depreciation for the Year
	Asset	Depreciable		Useful		Depreciation	Accumulated	Book
Date	Cost	Cost		Life		Expense	Depreciation	Value
1-2-2024	$30,000							$30,000
12-31-2024		$24,000		4 years	=	$6,000	$6,000	24,000
12-31-2025		24,000		4 years	=	6,000	12,000	18,000
12-31-2026		24,000		4 years	=	6,000	18,000	12,000
12-31-2027		24,000		4 years	=	6,000	24,000	6,000

Before calculating the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation expense per unit.

(	Cost	-	Residual value	)	Useful life in units	=	Depreciation per unit
(	$30,000	-	$6,000	)	4,800	=	$5

Prepare a depreciation schedule using the units-of-production method.

Units-of-Production Depreciation Schedule
		Depreciation for the Year
	Asset	Depreciation		Number of		Depreciation	Accumulated	Book
Date	Cost	Per Unit		Units		Expense	Depreciation	Value
1-2-2024	$30,000							$30,000
12-31-2024		480		5	=	$2,400	$2,400	27,600
12-31-2025		1440		5	=	7,200	9,600	20,400
12-31-2026		1920		5	=	9,600	19,200	10,800
12-31-2027		960		5	=	4,800	24,000	6,000

Enter any number in the edit fields and then click Check Answer.

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