Answer:
According to the straight-line depreciation, this number can be obtained by dividing the difference between an asset's cost and its expected salvage value.
<u>Depreciation</u> = Asset's Cost - Expected Salvage Value ÷ Expected Years of use
Explanation:
In the case of Tops Co., they purchase equipment for $12,000 - $500 of Salvage Value expected ÷ 5 Expected years of use
The estimated depreciation will be $2,300 for 5 years
At the beginning of the third year Tops Co. decided to use the equipment for 6 years and no salvage value.
The remaining purchase value will be $12,000 - $2,300 (x3) = $5,100
Apply again the formula described above and our answer will be:
The revised estimated depreciation is $1,700 for the remaining three years.
Answer:
Using the weighted average method, the Equivalent units for material is:
= Units completed and transferred out + Equivalent closing material
= 375,000 + (97,000 units * 80% complete with respect to materials)
= 375,000 + 77,600
= 452,600 units
Equivalent units for conversion:
= Units completed and transferred out + Equivalent closing units with respect to conversion
= 375,000 + (97,000 * 30%)
= 375,000 + 29,100
= 404,100 units
