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serg [7]
3 years ago
6

A diesel-powered tractor with a cost of $208,140 and an estimated residual value of $2,700 is expected to have a useful operatin

g life of 48,000 hours. During April, the tractor was operated 300 hours.
Determine the depreciation for the month.
Business
1 answer:
pychu [463]3 years ago
5 0

Answer:

$1,284

Explanation:

The computation of the depreciation expense is shown below

= (Cost of diesel-powered tractor - estimated residual value) ÷ (useful operating life)  

= ($208,140 - $2,700) ÷ ($48,000 hours)

= ($205,440) ÷ ($48,000 hours)  

= $4.28 per hour

Now for the month, it would be  

= Operated hours in a month × depreciation per hour

= 300 hours × $4.28

= $1,284

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Answer:

a. Statement of cost of goods manufactured.

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Beginning work-in-process inventory                                   13,040

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Beginning materials inventory                    46,800

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Available for Production                            366,800

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Direct labor                                                                         200,000

Indirect labor                                                                         40,000

Rent, factory building                                                           42,000

Depreciation, factory equipment                                        60,000

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Ending work-in-process inventory                                      (14,940)

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c. Prepare an income statement for external users.

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