Question

Ludmila Manufacturing purchased a piece of production equipment on January 1, 2009. The equipment cost $6,500 and was estimated to have a salvage value of $500 at the end of its six-year life or 12,000 hours of use.
Required:
(a) Compute depreciation expense on the production equipment for 2009 and 2010 and prepare the appropriate journal entries using the:
(1) Straight-line depreciation method
(2) Double-declining-balance depreciation method
(b) Assume that Ludmila uses the units-of-production method. Compute depreciation expense for 2009 and 2010 and prepare the appropriate journal entries, if the equipment were used 2,500 hours in 2009 and 1,900 hours in 2010.


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  • CreatedMarch 27, 2015
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