A company purchased an equipment system for $325,000 on January 2. The company expects the equipment to last for eight years or 60,000 hours of operation, with an estimated residual value of $25,000. During the first year, the equipment was in operation for 8,000 hours, while in the second year, the equipment was in operation for 8,700 hours. Compute the depreciation expense relating to the equipment for Year 1 and Year 2 using the following depreciation methods:
a. Straight-line.
b. Double-declining-balance.
c. Units-of-production.

Question

Quizplus · Accepted Answer

The Answer of A company purchased an equipment system for $325,000 on January 2. The company expects the equipment to last for eight years or 60,000 hours of operation, with an estimated residual value of $25,000. During the first year, the equipment was in operation for 8,000 hours, while in the second year, the equipment was in operation for 8,700 hours. Compute the depreciation expense relating to the equipment for Year 1 and Year 2 using the following depreciation methods:
a. Straight-line.
b. Double-declining-balance.
c. Units-of-production.

A Company Purchased an Equipment System for $325,000 on January