49 value 1000 points At the beginning of 2015 your company b

49. value 10.00 points At the beginning of 2015, your company buys a $32,800 piece of equipment that it expects to use for4 years. The equipment has an estimated residual value of 4,000. The company expects to produce a total of 200,000 units. Actual production is as follows: 42,000 units in 2015, 54,000 units in 2016, 52,000 units in 2017, and 52.000 units in 2018 Required a. Determine the depreciable cost. Depreciable Cost b. Calculate the depreciation expense per year under the straight-line method Depreciation Expense ear c. Use the straight-line method to prepare a depreciation schedule Net preciation Accumulate Expense Depreciation Value Acquisition cost 2015 2016 2017 2018

Solution

a.

Depreciable Cost = Cost - Residual Value = $ 32,800 - $ 4,000 = $ 28,800.

b.

Depreciation Expense per year = Depreciable Cost / Estimated Useful Life = $ 28,800 / 4 = $ 7,200.

c. Depreciation Table: Straight-Line Method.

d.

Depreciation rate per unit = Depreciable Cost / Total Expected Units of Production x 100 = $ 28,800 / 200,000 x 100 = 14.40 %

e. Depreciation Schedule: Units-of-Production Method

Depreciable Cost

$ 28,800