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# Online professor's response to: Depreciation

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Equipment purchased at the beginning of the fiscal year for \$150,000 is expected to have a usful life of 5 years, or 15,000 operating hours, and a residual value f \$30,000. Computing the depreciation for the first and second years of use by each of the following methods:

(a) straight-line
(b) units-of-production (2,500 hours first year; 3,250 hours second year)
(c) declining-balance at twice the straight-line rate

(Round to the nearest Dollar)

#### Solution Preview

Hello

Please see the solution and explanations below and as an attachment

(a) straight-line
Under this method we first calculate the total depreciation amount in useful life.

Total depreciable value of asset = Purchase amount - residual value (salvage value) at the end of useful life
= 150000-30000
= ...

#### Solution Summary

Solution contains computation of depreciation for first and second year of use by using different methods.

\$2.19