Thomas Company purchased equipment for $640,000 cash on January 1, 2007. The estimated life is 5...
Thomas Company purchased equipment for $640,000 cash on January 1, 2007. The estimated life is 5 years or 1,000,000 units; salvage value is estimated at $-0-. Actual activity was 180,000 units in 2007, and 200,000 units in 2008. Which of the following is true?
a. Under the straight-line method the depreciation expense in 2007 would be different from that in 2008
b. Under the units-of-activity method, the depreciation in 2008 would be $128,000
c. Under the double declining method, the depreciation in 2008 would be $160,000
d. Under the double declining method, the depreciation in 2007 would be $128,000
e. Under the units-of-activity method, the depreciation in 2007 would be $128,000
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Thomas Company purchased equipment for $640,000 cash on January
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years.
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Required:
Prepare a schedule showing the annual depreciation and end-of-year
accumulated depreciation for the first three years of the asset’s
life under the straight-line method, the sum-of-the-years’-digits
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