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Depreciation Methods Winsey Company purchased equipment on January 2, 2019, for $700,000. The equipment has the following characteristics: During 2019 and 2020, the company used the machine for 4,500 and 5,500 hours, respectively, and produced 40,000 and 60,000 units, respectively. Required: Compute depreciation expense for 2019 and 2020 under each of the following methods: 1. straight-line method 2. activity method based on hours worked (round the depreciation rate per hour to 2 decimal places) 3. activity method based on units of output (round the depreciation rate per unit to 2 decimal places) 4. sum-of-the-years’-digits method 5. double-de dining-balance method 6. 150%-declining-balance method 7. Next Level If Winsey used a service life of 16 years, 80,000 hours, or 750,000 units of output, what would be the effect on depreciation expense under the straight-line, sum-of-the-years’-digits, and declining-balance depreciation methods? Round your answers to the nearest dollar.

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

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Chapter
Section
Chapter 11, Problem 1P
Textbook Problem

Depreciation Methods Winsey Company purchased equipment on January 2, 2019, for $700,000. The equipment has the following characteristics:

Chapter 11, Problem 1P, Depreciation Methods Winsey Company purchased equipment on January 2, 2019, for 700,000. The

During 2019 and 2020, the company used the machine for 4,500 and 5,500 hours, respectively, and produced 40,000 and 60,000 units, respectively.

Required:

Compute depreciation expense for 2019 and 2020 under each of the following methods:

  1. 1. straight-line method
  2. 2. activity method based on hours worked (round the depreciation rate per hour to 2 decimal places)
  3. 3. activity method based on units of output (round the depreciation rate per unit to 2 decimal places)
  4. 4. sum-of-the-years’-digits method
  5. 5. double-de dining-balance method
  6. 6. 150%-declining-balance method
  7. 7. Next Level If Winsey used a service life of 16 years, 80,000 hours, or 750,000 units of output, what would be the effect on depreciation expense under the straight-line, sum-of-the-years’-digits, and declining-balance depreciation methods? Round your answers to the nearest dollar.

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Chapter 11 Solutions

Intermediate Accounting: Reporting And Analysis
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