Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Calculate the amount of depreciation to report during the year ended December 31 for equipment that was purchased for $43,000 on October 1. The equipment has an estimated residual value of $3,000 and an estimated useful life of five years or 20,000 hours.
Assume the equipment was used for 1,000 hours from October 1 to December 31.
A) Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (43,000 - 3,000)/5=8,000
Year 1 depreciation= 8,000/12*3= 2,000
B) Annual depreciation= 2*[(original cost - residual value)/estimated life (years)]
Year 1= 16,000/12*3= 4,000
C) Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
Annual depreciation= 40,000/20,000= 2
Year 1= 2*1000hs= 2,000
