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    Depreciation Computations-Five Methods

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    4. (Depreciation Computations-Five Methods) Jon Seceda Furnace Corp. purchased
    machinery for $315,000 on May 1, 2004. It is estimated that it will have a useful life of
    10 years, scrap value of $15,000, production of 240,000 units, and working hours of
    25,000. During 2005 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 2005 under each of
    the following methods. (Round to three decimal places.)
    a. Straight-line.
    b. Units-of-output.
    c. Working hours.
    d. Sum-of-the-years'-digits.
    e. Declining-balance (use 20% as the annual rate).

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    Solution Preview

    Some corrections have been done

    1. Units of output ( the amout has been corrected)

    2. In sum of years - the ...

    Solution Summary

    The solution explains the depreciation calculations for Straight-line, Units-of-output, Working hours, Sum-of-the-years'-digits and Declining-balance method.