Question

Angle Co. purchased assembly equipment for $600,000 on January 1, 2013. Angle’s financial condition immediately prior to the purchase is shown in the following horizontal statements model:


The equipment is expected to have a useful life of 200,000 machine hours and a salvage value of $20,000. Actual machine-hour use was as follows:
2013 ......... 56,000
2014 ......... 61,000
2015 ......... 42,000
2016 ......... 36,000
2017 ......... 10,000

Required
a. Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation.
b. Assume that Angle earns $210,000 of cash revenue during 2013. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the preceding one.
c. Assume that Angle sold the equipment at the end of the fifth year for $21,500. Record the general journal entry for thesale.


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  • CreatedOctober 26, 2013
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