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:
(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)© BrainMass Inc. brainmass.com December 15, 2020, 12:35 pm ad1c9bdddf
Please see the solution and explanations below and as an attachment
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
Solution contains computation of depreciation for first and second year of use by using different methods.