Fantasmic Moulds purchased equipment on January 1,2015 for $275,000.It was estimated that the equipment would have a residual value of $25,000 at the end of its useful life.The asset's useful life was estimated at 5 years or 10,000 units of output.The company has a December 31 year end.
Additional Information

Assuming the company uses the units-of-production depreciation method,what is the depreciation expense for 2015?

Question

Fantasmic Moulds purchased equipment on January 1,2015 for $275,000.It was estimated that the equipment would have a residual value of $25,000 at the end of its useful life.The asset's useful life was estimated at 5 years or 10,000 units of output.The company has a December 31 year end.
Additional Information

Assuming the company uses the units-of-production depreciation method,what is the depreciation expense for 2015?

Quizplus · Accepted Answer

C)(275,000 - 250,000)/ 10,000 = $25.00 per unit
25 × 2,100 = 52,500

Fantasmic Moulds Purchased Equipment on January 1,2015 for $275,000