An item of equipment acquired on January 1 at a cost of $60,000 has an estimated use

Question:

An item of equipment acquired on January 1 at a cost of $60,000 has an estimated use of 25,000 hours. During the first three years, the equipment was used 5,000 hours, 6,000 hours, and 4,000 hours, respectively. The estimated of the equipment is $10,000.

Required
Determine the depreciation for each of the three years, using the unit-of-production method.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...