[The following information applies to the questions
displayed below.]
Super Saver Groceries purchased store equipment for $31,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $4,000. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Super Saver used the equipment for 1,500 hours the first year.
Required:
Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.)
Homework Answers
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Straight line = (Cost - Salvage value) /useful life = (31,000-4000)/10 = 2700 |
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Double declining rate = 200/useful life = 200/10 = 20% = 31,000*10% = 3100 |
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Activity based = (31,000-4,000)/10,000 * 1500 = 4050 |
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