Question

Sabel Co. purchased assembly equipment for $500,000 on January 1, 2016. Sabel’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 m a chine-hour use was as follows:
2016 .... 56,000
2017 ..... 61,000
2018 ..... 42,000
2019 ..... 36,000
2020 ..... 10,000
Required
a. Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation.
b. Assume that Sabel earns $230,000 of cash revenue during 2016. 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 Sabel sold the equipment at the end of the fifth year for $20,600. Record the general journal entry for the sale.


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  • CreatedApril 20, 2015
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