Question

Blue Spruce Corp. purchased equipment on January 1, 2021 for $162,000. It is estimated that the...

Blue Spruce Corp. purchased equipment on January 1, 2021 for $162,000. It is estimated that the equipment will have a $9,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 180,000 units over its 5-year life.

Answer the following independent questions.

Compute the amount of depreciation expense for the year ended December 31, 2021 using the straight-line method of depreciation.

Straight-line method $enter the depreciation expense under the straight-line method for the year ended December 31, 2016 in dollars per year

  

  

Question Part Score

--/3

If 16,000 units of product are produced in 2021 and 24,000 units are produced in 2022, what is the book value of the equipment at December 31, 2022? The company uses the units-of-activity depreciation method.

Book value at December 31, 2022 $enter the book value of the equipment at December 31, 2017 in dollars

  

  

Question Part Score

--/5

If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation—Equipment account at December 31, 2023?

Accumulated Depreciation—Equipment

Homework Answers

Answer #1
1) Straight line depreciation
(cost - salvage value)/estimated useful lfe
(162000-9000)/5
30600
Straight line method 30600 per year
2) units activity method
Depreciation rate
(162000-9000)/180000
0.85 per year
book value
original cost 162,000
Accumulated dep (16000+24000)*.85 -34000
Book value 128,000
Book value at December 31,2022 128,000
3) Double declining method
dep rate = 1/5*2
40%
year Beg bal Dep exp Acc dep Book value
2021 162,000 64800 64800 97,200
2022 97,200 38880 103680 58,320
2023 58,320 23328 127008 34,992
accumulated depreciation -Equipment 127008
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