Question: Muggsy Bogues Company purchased equipment for 212 000 on Octobe

Muggsy Bogues Company purchased equipment for $212,000 on October 1, 2014. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,000. Estimated production is 40,000 units and estimated working hours are 20,000. During 2014, Bogues uses the equipment for 525 hours and the equipment produces 1,000 units.

Compute depreciation expense under each of the following methods. Bogues is on a calendar-year basis ending December 31.
(a) Straight-line method for 2014.
(b) Activity method (units of output) for 2014.
(c) Activity method (working hours) for 2014.
(d) Sum-of-the-years’-digits method for 2016.
(e) Double-declining-balance method for 2015.

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  • CreatedJune 03, 2013
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