Brookside Enterprises acquired a piece of machinery on January 3,2010.The total cost of the machinery was $138,600.Brookside estimated that the machinery would be used for 77,000 hours before being sold for an estimated $3,850.Brookside uses the units-of-production method of depreciation.Assuming the machine was used for 15,800 hours during 2010,18,300 hours during 2011,and 17,400 hours during 2012,the balance in the accumulated depreciation account on January 2,2013 would be:

Question

Quizplus · Accepted Answer

To calculate the balance in the accumulated depreciation account using the units-of-production method, first, find the depreciation per hour by subtracting the salvage value from the cost and dividing by the total estimated hours of use: ($138,600 - $3,850) / 77,000 hours = $1.75 per hour. Then, multiply the depreciation per hour by the total hours used over the three years: $1.75 * (15,800 + 18,300 + 17,400) = $90,125.

Brookside Enterprises Acquired a Piece of Machinery on January 3,2010