Question

At the beginning of 2017, your company buys a $28,800 piece of equipment that it expects to use for 4 years. The equipment has an estimated residual value of 2,000. The company expects to produce a total of 200,000 units. Actual production is as follows: 47000 units in 2017, 51,000 units in 2018, 47,000 units in 2019, and 55,000 units in 2020. Required: a. Determine the depreciable cost. b. Calculate the depreciation expense per year under the straight-line method. c. Use the straight-line method to prepare a depreciation schedule. d. Calculate the depreciation rate per unit under the units-of-production method. e. Use the units-of-production method to prepare a depreciation schedule. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Determine the depreciable cost. Depreciable Cost Required B > < Prev 29 of 30 Next

Answer 1

A
Depreciable cost	26800	=28800-2000
B
Depreciation expense per year	6700	=26800/4
C
Year	Depreciation expense	Accumulated Depreciation	Net Book value
Acquisition cost			28800
2017	6700	6700	22100
2018	6700	13400	15400
2019	6700	20100	8700
2020	6700	26800	2000
D
Depreciation rate per unit	0.134	=26800/200000
E
Year	Depreciation expense	Accumulated Depreciation	Net Book value
Acquisition cost			28800
2017	6298	6298	22502
2018	6834	13132	15668
2019	6298	19430	9370
2020	7370	26800	2000
Workings for E:
	Depreciation expense
2017	6298	=47000*0.134
2018	6834	=51000*0.134
2019	6298	=47000*0.134
2020	7370	=55000*0.134