On January 1, 2021, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and have a residual value of $4,000. During its eight-year life, the equipment is expected to produce 250,000 units of product. In 2021 and 2022, 42,000 and 76,000 units, respectively, were produced. Required: Compute depreciation for 2021 and 2022 and the book value of the spooler at December 31, 2021 and December 31, 2022, assuming the units-of-production method is used.
On January 1, 2021, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and have a residual value of $4,000. During its eight-year life, the equipment is expected to produce 250,000 units of product. In 2021 and 2022, 42,000 and 76,000 units, respectively, were produced. Required: Compute depreciation for 2021 and 2022 and the book value of the spooler at December 31, 2021 and December 31, 2022, assuming the units-of-production method is used.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
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On January 1, 2021, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and have a residual value of $4,000. During its eight-year life, the equipment is expected to produce 250,000 units of product. In 2021 and 2022, 42,000 and 76,000 units, respectively, were produced.
Required:
Compute
20212022DepreciationBook value
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