Using the information below, determine the depreciation of the machinery using Straight Line Depreciation, Units of Production,
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Using the information below, determine the depreciation of the machinery using Straight Line Depreciation, Units of Production, and Double Declining Balance. Then complete the journal entry for the 1st year of use for each method. Depreciation will be recorded for the year on December 31. Use the Excel template provided in Blackboard. | ||||||
Equipment Purchase Price | $75,000 | |||||
Useful Life | 5 years or 95,000 units | 25,000 units in Year 1 | ||||
Salvage Value | $8,500 | |||||
Straight Line Depreciation: | ||||||
Cost- Salvage Value | Years | Depreciation per Year | ||||
$8,500 | 5 | $2,833.00 | ||||
Is says cost - salvage value, not salvage value. | ||||||
Units of Production: | ||||||
Cost- Salvage Value | Units | Depreciation per Unit | ||||
$66,400 | 95,000 | 13280 | What is the depreciation per unit? | |||
Units in Year 1 = | 25,000 | |||||
Depreciation per Year = | $2,833.00 | |||||
Double Declining Balance: | ||||||
Rate of Depreciation = | 10% | I think the PowerPoint for week 4 will help you with this. | ||||
Book value | Percent | Depreciation per Year | ||||
General Journal | ||||||
Date | Account | PR | Dr | Cr | ||
Week 5 | ||||||
31-Dec | Depreciation Expense | 13,300.00 | ||||
31-Dec | Accumulated Depreciation indent | 13,300.00 | ||||
31-Dec | Depreciation Expense | 17,500.00 | ||||
31-Dec | Accumulated Depreciation Indent | 17,500.00 | ||||
31-Dec | Depreciation Expense | 30,000.00 | ||||
31-Dec | Accumulated Depreciation indent | 30,000.00 | ||||
how to record |
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