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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)

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    https://brainmass.com/business/depreciation/computing-depreciation-78437

    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