Question

Hearty Fried Chicken bought equipment on January 2, 2018, for $15,000. The equipment was expected to remain in service for four years and to operate for 2,400 hours. At the end of the equipment's useful life, Hearty estimates that its residual value will be $3,000. The equipment operated for 240 hours the first year, 720 hours the second year, 960 hours the third year, and 480 hours the fourth year. Read the requirements. Prepare a depreciation schedule using the units-of-production method. Units-of-Production Depreciation Schedule Depreciation for the Year Depreciation Depreciation| Accumulated Asset Number of Book Units Value Date Cost Per Unit Expense Depreciation 15000 15000 1-2-2018 2400 600 2400 12-31-2018 х %3D 1800 7200 12-31-2019 %3D 2400 9600 4 x 12-31-2020 4 1200 4800 12-31-2021 х

Answer 1

Answer:

Year	Asset Cost	Depreciation Expense			Accumulated Depreciation	Book Value (Asset Cost – Accumulated Depreciation)
		Depreciation per unit	No of unit	Depreciation Expense
02-Jan-18	15,000			0	0	15,000
31-Dec-18		5.00	240	1200	1,200	13,800
31-Dec-19		5.00	720	3600	4,800	10,200
31-Dec-20		5.00	960	4800	9,600	5,400
31-Dec-21		5.00	480	2400	12,000	3,000
Depreciation Rate per Unit = (Cost - Salvage Value)/Total Estimated Production = (15,000 - 3,000)/2,400 =$5