Current Attempt in Progress On January 1, 2020, SugarBear Company acquired equipment costing $125,000, which will be depreciated on the assumption that the equipment will be useful for five years and have a residual value of $10,600. The estimated output from this equipment is as follows: 2020-14,000 units, 2021-20,000 units: 2022-29,000 units; 2023-26,000 units; 2024-15,000 units. The company is now considering possible methods of depreciation for this asset. (a) Calculate what the depreciation expense would be for each year of the asset's life, if the company chooses: i. The straight-line method Straight-line depreciation S per year
Current Attempt in Progress On January 1, 2020, SugarBear Company acquired equipment costing $125,000, which will be depreciated on the assumption that the equipment will be useful for five years and have a residual value of $10,600. The estimated output from this equipment is as follows: 2020-14,000 units, 2021-20,000 units: 2022-29,000 units; 2023-26,000 units; 2024-15,000 units. The company is now considering possible methods of depreciation for this asset. (a) Calculate what the depreciation expense would be for each year of the asset's life, if the company chooses: i. The straight-line method Straight-line depreciation S per year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Current Attempt in Progress
On January 1, 2020. SugarBear Company acquired equipment costing $125,000, which will be depreciated on the assumption that the
equipment will be useful for five years and have a residual value of $10,600. The estimated output from this equipment is as follows:
2020-14,000 units; 2021-20,000 units: 2022-29,000 units; 2023-26,000 units; 2024-15,000 units. The company is now
considering possible methods of depreciation for this asset.
(a)
Calculate what the depreciation expense would be for each year of the asset's life, if the company chooses:
i. The straight-line method
Straight-line depreciation S
per year
Transcribed Image Text:ii.
The units-of-production method (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answer to 0 decimal places
125.)
Units-of-production method depreciation S
Year
2020
S
2021 S
2022 S
2023 S
2024 S
iii. The double-diminishing-balance method
Rate
Year
2020 S
2021 S
2022 $
2023 S
2024 S
%
per unit
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