Depreciation Computations: Five Methods
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Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2007. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 250,000 units, and working hours of 25,000. During 2008 Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units.
From the information given, compute the depreciation charge for 2008 under each of the following methods. (Round to the nearest dollar.) (a) Straight-line, (b) Units-of-output, (c) Working hours, (d) Sum-of-the-years' digits, and (e) Declining balance (use 20% as the annual rate).
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Solution Summary
The solution explains the calculation of depreciation using (a) straight-line, (b) units-of-output, (c) Wworking hours, (d) sum-of-the-years' digits, and (e) declining balance methods in the attached Word document. Actual calculations and answers are also provided.
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