Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Purchased at a cost of $56,000 on October 1. The equipment has an estimated residual value of $2,000 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= (56,000 - 2,000)/5= 10,800
Year 1= 10,800/12*3= $2,700
B) Annual depreciation= 2*[(original cost - residual value)/estimated life (years)]
Annual depreciation= 21,600
Year 1= 21,600/12*3= 5,400
C) Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
Year 1= (54,000/20,000)*1000= $2,700
