Windstreamers,Inc.acquired a piece of machinery on January 3,2010.The total cost of the machinery was $68,400.Windstreamers estimated that the machinery would be used to produce 100,000 units of product before being sold for an estimated $11,600.Windstreamers uses the units-of-production method of depreciation.Assuming the machine produced 18,500 units during the year ended December 31,2010,the 2008 depreciation expense was:

Question

Quizplus · Accepted Answer

The depreciation expense is calculated using the units-of-production method: [(Cost - Salvage Value) / Total Estimated Units] * Units Produced in the Year = [(68,400 - 11,600) / 100,000] * 18,500 = $10,508.