Business
Accounting
Equipment was purchased at the beginning of 2011 for $100,000

Equipment was purchased at the beginning of 2011 for $100,000 with an estimated product life of 300,000 units. The estimated

Question:

Equipment was purchased at the beginning of 2011 for $100,000 with an estimated product life of 300,000 units. The estimated salvage value was $4,000. During 2011, 2012, and 2013, the equipment produced 80,000 units, 120,000 units, and 40,000 units, respectively. The machine was damaged at the beginning of 2014, and the equipment was scrapped with no salvage value.
1. Determine depreciation using the productive-output method for 2011, 2012, and 2013.
2. Give the entry to write off the equipment at the beginning of 2014.
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...