Answered: Year Utilization (hr/yr) Year…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EA: Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is...

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A heavy construction firm has been awarded a contract to build a large concrete dam. It is expected that a total of 8 years will be required to complete the work. The firm will buy $600,000 worth of special equipment for the job. During the preparation of the job cost estimate, the following utilization schedule was computed for the special equipment:

Year Utilization (hr/yr) Year Utilization (hr/yr)
1
6000
800
2
4000
800
3
4000
7
2200
816
4
1600
8 2200
At the end of the job, it is estimated that the equipment can be sold
at auction for $60,000.
(a) Compute the straight-line depreciation schedule.
(b) Compute the unit-of-production depreciation schedule.

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