Dougan Company purchased equipment on January 1 2016 for $90000. It is estimated that the equipment will have a $5000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100000 units over its 5-year life.
Instructions
Answer the following independent questions.
1. Compute the amount of depreciation expense for the year ended December 31 2016 using the straight-line method of depreciation.
2. If 16000 units of product are produced in 2016 and 24000 units are produced in 2017 what is the book value of the equipment at December 31 2017? The company uses the units-of-activity depreciation method.
3. If the company uses the double-declining-balance method of depreciation what is the balance of the Accumulated Depreciation-Equipment account at December 31 2018?

Question

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The Answer of Dougan Company purchased equipment on January 1 2016 for $90000. It is estimated that the equipment will have a $5000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100000 units over its 5-year life.
Instructions
Answer the following independent questions.
1. Compute the amount of depreciation expense for the year ended December 31 2016 using the straight-line method of depreciation.
2. If 16000 units of product are produced in 2016 and 24000 units are produced in 2017 what is the book value of the equipment at December 31 2017? The company uses the units-of-activity depreciation method.
3. If the company uses the double-declining-balance method of depreciation what is the balance of the Accumulated Depreciation-Equipment account at December 31 2018?

Dougan Company Purchased Equipment on January 1 2016 for $90000