Question

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! Required information [The following information applies to the questions displayed below.) On October 1, 2021, the Allegheny Corporation purchased equipment for $181,000. The estimated service life of the equipment is 10 years and the estimated residual value is $5,000. The equipment is expected to produce 400,000 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, 16,000; units produced in 2022, 31,000). (Round "Depreciation per unit rate" answers to 2 decimal places.) Select formula for Units of Production Depreciation: 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

	Formula = Depreciation per unit rate * Unit Produced in Year
	Calculate 2021 depreciation expnese
	Depreciation per unit rate	0.44
	Units Produced in 2021	16000
	Depreciation in 2021	7040
	Calculate 2022 depreciation expnese
	Depreciation per unit rate	0.44
	Units Produced in 2022	31000
	Depreciation in 2022	13640
	Note : Depreciation per unit = (Cost of asset - residual value )/Expected units produce
	=(181000 - 5000)/400000
	0.44	per unit