Question

On October 1, 2021, the Allegheny Corporation purchased equipment for $203,000. The estimated service life of the equipment is 10 years and the estimated residual value is $5,000. The equipment is expected to produce 300,000 units during its life.

Required:
Calculate depreciation for 2021 and 2022 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service.

3. Units of production (units produced in 2021, 18,000; units produced in 2022, 33,000). (Round "Depreciation per unit rate" answers to 2 decimal places.)

Select formula for Units of Production Depreciation:

(Cost-Salvage)/Total units of production

Calculate 2021 depreciation expense:

Depreciation per unit rate: ?

Units Produced in 2021: ?

Depreciation in 2021: ?

Calculate 2022 depreciation expense:

Depreciation per unit rate: ?

Units Produced in 2022: ?

Depreciation in 2022: ?

Answer 1

Answer:- Given data, cost = $203,000 vendual value = $5000 Useful life = 10 years for 300,000 units Units of Production method: FOY 2021 cost - Salvage value ů Depreciation por unst rate= Total units of production $203,000 - $ 5000 309,000 units = $0.66 18000 units ii) Units produced in 2021 = (ll) Depreciatios m 2021 = = $ 0.66 X 18000 units $ 11,880 for 2022;- Cij Depreciation per unit rate - $203000 - $ Sood 300,000 units = $ 0.66. to units produted in 2022 – 33000 units (Depreùo tion in 2012 = $0.66 X 33,000 units - $ 24780