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ABC Corporation has the following information regarding a piece of manufacturing equipment that was purchased on January 1, 2015.
Cost of the equipment = $900,000
Estimated residual value = $130,000
Useful life = 5 years
Total productive capacity = 1,400,000 units
Estimated production in 2015 = 200,000 units
Estimated annual production next 4 years = 300,000 units per year
What is the annual depreciation expense for 2015 if ABC Corporation uses the straight-line method of depreciation?
| | a. | $180,000 |
| | b. | $144,000 |
| | c. | $168,000 |
| | d. | $154,000 |
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ABC Corporation has the following information regarding a piece of manufacturing equipment that was purchased on January 1, 2015.
Cost of the equipment = $900,000
Estimated residual value = $130,000
Useful life = 5 years
Total productive capacity = 1,400,000 units
Estimated production in 2015 = 200,000 units
Estimated annual production next 4 years = 300,000 units per year
What is the carrying amount of the asset at December 31, 2018 if ABC Corporation uses the units-of-production method of depreciation?
| | a. | $295,000 |
| | b. | $274,000 |
| | c. | $460,000 |
| | d. | $192,857 |
| | e. | $385,714 |
ABC Corporation has the following information regarding a piece of manufacturing equipment that was purchased on January 1, 2015.
Cost of the equipment = $900,000
Estimated residual value = $130,000
Useful life = 5 years
Total productive capacity = 1,400,000 units
Estimated production in 2015 = 200,000 units
Estimated annual production next 4 years = 300,000 units per year
What is the carrying amount of the asset at December 31, 2017 if the company uses the double-declining balance method of depreciation?
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