Question

thank you

Question 6 View Policies Current Attempt in Progress Sunland Company purchased equipment for $222.000 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $13.200. Estimated production is 36,000 units and estimated working hours are 20.000. During 2020, Sunland uses the equipment for 550 hours and the equipment produces 1.000 units Compute depreciation pense under each of the following methods. Sunland is on a calendar year basis ending December 31. Round rate per hour and rate per unit to 2 decimal places, s. 5.35 and final answers to decimal places. 3. 45,892) (a) Straight-line method for 2020 Activity method units of output) for 2020 $ Id Activity method working hours) for 2020 Sum of-the-years-digits method for 2022 el Double-declining balance method for 2021 $ Attempts: 0 of 10 used Submit Answer Send to Gradeboek MacBook Air с и в

Answer 1

b) Straight line method for 2020 $ 6,525 Activity Method (units of output) for 2020 $ 5,800 Activity Method (working hours) for 2020 $ 5,742 Sum of the years digits method for 2022 S 34,800 Double declining balance method for 2021 $ 52,031

Calculation of depreciation Straight line method for 2020 Depreciation = (Cost of Equipment - Salvage Value)/No of years =(222000-13200)/8 $ 26,100 Equipment purchased in october 2020 so depreciation should be calculate for 3 months =26100*3/12 $ 6,525 b) Activity Method (units of output) for 2020 Depreciable base = Asset Cost - salvage value =222000-13200 208800 Depreciation per unit = Depreciable Base/Estimated units =208800/36000 5.8 Depreciation for 2020 = No : of units produces in a period * Depreciation per unit =1000 units*5.8 $5,800 c) Activity Method (working hours) for 2020 Depreciable base = Asset Cost - salvage value =222000-13200 208800 Depreciation per hour = Depreciable Base/Estimated working hours =208800/20000 10.44 Depreciation for 2020 = No : of hours used * Depreciation per hour =550 hours* 10.44 $5,742 Sum of the years digits method for 2022 Depreciation =( Remaining useful life of the asset/Sum of the years digits) *Depreciable cost here we have to calculate depreciation for the year 2022 so remaining useful life is 6 years Sum of the years digits = 1+2+3+4+5+6+7+8 36 Depreciable cost = Asset cost - salvage value =222000-13200 208800 Depreciation = 208800*(6/36) S34,800 Double declining balance method for 2021 In double declining first we have to calculate depreciation rate Depreciation rate = 1/useful life* 100 =(1/8)*100 12.5 Double declining formula = 2*book value * depreciation rate For 2021=2*222000*12.5%*(3/12) 13875 Book value for 2021 = 222000-13875 208125 For 202 =2*208125*12.5% 52031.25