Depriciation expense-accounting?
a. Ccompute the amount of depreciation expense for the year ending December 31 2004, using the straight-line method of depreciation.
2004 depreciation expense =
b. if 18,000 units of product are produced in 2004 and 25,000 units are produced in 2005, what is the book value of the equipment on Dec 31, 2005? The company uses the units of activity depreciation method.
December 31, 2005 book value=
c. If the company used the double declining balance method of depreciation what is the balance in the accumulated depreciation eqipment account on Dec 31, 2006?
Favorite Answer
Expense in 2004 – 12,000
b. Depreciation = (65000 – 5000)/100000 = 0.6 per unit
31.12.05 book value = 65,000 – 18,000*.6 – 25,000*.6
= 65,000 – 10,800 – 15,000
= 39,200
c 2004 2 * 20% = 40% x 60,000 = 24,000
2005 40% x 36,000 = 14,400
2006 40% x 21,600 = 8,640 – though some versions of double declining say switch to straight line – 12,000
so either 47,040 or 50,400 depending on which one is used
b. $39,200
c. $47,040
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