Fields of Green,a turf farm,purchased equipment at the beginning of 2012 for $175,000.In addition,the company paid $6,000 for delivery of the equipment and $4,000 for set up charges.The equipment has an estimated residual value of $5,000 and an estimated life of 10 years or 50,000 hours of operation.The equipment was operated for 5,200 hours in 2012 and 5,000 hours in 2013.
A) Compute the depreciation expense for 2012 using the:
- straight line method;
- units-of-production method;
- double-de clining-balance method
B) Compute the book value of the equipment on December 31,2013 , assuming the use of:
- straight line method;
- units-of-production method; and
- double-de clining-balance method
C) Whichmethod of depreciation prochuces the greatest total amount of depreciation?
D) Wrichmethod of depreciation is considered accelerated?
E) What are the advantages of using an accelerated depreciation method as compared to the straight-line method?
Correct Answer:
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Units-of-production:...
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