Question

On June 30, 2021, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 313,000 units and no residual value. The cost of the machine was $469,500 and is to be depreciated using the units-of-production method. During the six months of 2021, 37,000 units of product were produced. At the beginning of 2022, engineers estimated that the machine can realistically be used to produce only another 258,750 units. During 2022, 83,000 units were produced.

Prego would report depreciation in 2022 of:

Multiple Choice

• $110,067.

• $132,800.

• $166,500.

• $124,500.

Answer 1

Answer! Units of production methods First we have to calculate depreciation Expense for 2021, i obe For 2021 depreciation = ina ($469,500 - 99 x 37000 $ 313000 - cost- salvagevalle), Current year units Total production unils = $55,500 In given datty At the beginning of 2021, machine produce only another 258,750 units :Revised book value = = $414,000 .: For 2022 depreciation = ($414,000-0) x 83000 units 258,750 units = $ 132,800 :option 't is correct