Question

Question 1 --/1 View Policies Current Attempt in Progress Concord Company purchased equipment for $228,400 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,400. Estimated production is 40,000 units and estimated working hours are 20,000. During 2020, Concord uses the equipment for 500 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Concord is on a calendar-year basis ending December 31. (Round rate per hour and rate per unit to 2 decimal places, e.g. 5.35 and final answers to 0 decimal places, e.g. 45,892.) (a) Straight-line method for 2020 to (b) Activity method (units of output) for 2020 to (c) (d) Activity method (working hours) for 2020 Sum-of-the-years'-digits method for 2022 $ $ (e) Double-declining-balance method for 2021 $ Toythookand Media

Answer 1

Answer compute depreciation Expense under each of the Following methods - (a) Straight line method for 2020 $ 6750 Depreciation Expense = (Cost - Salvage value) No. of useful life in years Cost of the Equipmant - $228400 useful life of the years Equipment Salvage value * $ 12400 Depreciation Expense = ($228400 - $12400 ] x 3 months I syears = $6750 12 months (6) Activity method (units of output) for 2020 $ 5400 Depreciation Expense = (cost - salvage value & Actual production Estimated products Depreciation Expense (Cost-salvage value & Actual production Estimated production Depreciation Extence ($ 20400 - $ 12400) X tooo unites 40000 units = $5400

(c) Activity method (working hours) for 2020 $ 5400 Value Depreciation Expense = [cost - saivage) x Actual working hours Estimated working Depreciation expense = ($ 228400 - $ 12400 x 500 hours hours" 20000 hours = $ 5400 (d) Sum of the year's digits method for 2022 $ 12.000 No. of useful life of = 8years the equipment Sum of the useful life = (8 +7 +6+5+4 +3 +2 +1) the equipment Depreciation Expense = ($228400 - $ 12400 x 8 x 3 months 36 12 months = $48000 x 3 months = $12000 = 36 12 months

(0) Double Decilning balance method for 2021 $ 13500 valde Depreciation Expense = 2x Straight line x(cost - salvage) 1 Depreciation rate Straight line Deprecation rate = 100 useful life of the equipment Straight line Depreciation rate = 100 Byears = 12.5 % Depreciation Expense = 2 x 12. 0 - $12400) x 3 marts 12 months 100 = 25 $54000 100 = $ 13500