Quick Producers acquired factory equipment on March 1 of Year 1 costing $39,000 . In view of pending technological developments, it is estimated that the equipment will have an $8,000 resale value upon disposal in four years and that disposal costs will be $500. Data relating to the equipment follow. Estimated Service Life

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Quick Producers acquired factory equipment on March 1 of Year 1 costing $39,000 . In view of pending technological developments, it is estimated that the equipment will have an $8,000 resale value upon disposal in four years and that disposal costs will be $500. Data relating to the equipment follow.

Estimated Service Life
Years 4
Service hours 20,000

 

Calendar Year Actual Service Hours
Year 1 4,700
Year 2 5,000
Year 3 4,800
Year 4 4,400
Year 5 1,000

 

Required

Compute depreciation expense each year for the life of the asset assuming (1) units-of-production, (2) straight-line, (3) sum-of-the-years’-digits, and (4) double-declining-balance depreciation.
●Note: Round depreciation expense to the nearest whole dollar

1. Units-of-Production
●Note: Do not use negative signs with any of your answers.

  Numerator   Denominator   Result
Depreciation per Unit Answer

 

÷ Answer

 

=  

 

●Note: Use the result EXACTLY as displayed above in the calculations below.

    Depreciation for the Period
  Reporting Units of Depreciation per Depreciation
  Period Output Unit Expense
  Dec. 31, Year 1 Answer

 

Answer

 

Answer

 

  Dec. 31, Year 2 Answer

 

  Answer

 

  Dec. 31, Year 3 Answer

 

  Answer

 

  Dec. 31, Year 4 Answer

 

  Answer

 

  Dec. 31, Year 5 Answer

 

  Answer

 

 

2. Straight-Line

  Reporting Depreciation
  Period Expense
  Dec. 31, Year 1 Answer

 

  Dec. 31, Year 2 Answer

 

  Dec. 31, Year 3 Answer

 

  Dec. 31, Year 4 Answer

 

  Dec. 31, Year 5 Answer

 

 

3. Sum-of-the-Years'-Digits

Reporting Depreciation
Period Expense
Dec. 31, Year 1 Answer

 

Dec. 31, Year 2 Answer

 

Dec. 31, Year 3 Answer

 

Dec. 31, Year 4 Answer

 

Dec. 31, Year 5 Answer

 

 

4. Double-Declining Balance

Reporting Depreciation
Period Expense
Dec. 31, Year 1 Answer

 

Dec. 31, Year 2 Answer

 

Dec. 31, Year 3 Answer

 

Dec. 31, Year 4 Answer

 

Dec. 31, Year 5 Answer

 

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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