Aramco purchases chemical processing machinery for $550,000. The equipment has an estimated useful life of five...

 

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Aramco purchases chemical processing machinery for $550,000. The equipment has an estimated useful life of five years and an estimated salvage value of $50,000. The company expects to produce 20,000 units of output using this machinery, with 6,000 units in each of the first two years, 3,000 units in the next two years, and 2,000 units in the fifth year. Calculate the machinery yearly depreciation using (a) a straight-line method, (b) the double declining method, (c) the units of production method. Aramco purchases chemical processing machinery for $550,000. The equipment has an estimated useful life of five years and an estimated salvage value of $50,000. The company expects to produce 20,000 units of output using this machinery, with 6,000 units in each of the first two years, 3,000 units in the next two years, and 2,000 units in the fifth year. Calculate the machinery yearly depreciation using (a) a straight-line method, (b) the double declining method, (c) the units of production method.

Answer rating: 100% (QA)

a Straightline method The depreciable cost of the machinery is the purchase cost minus the salvage value which is 550000 50000 500000 The yearly depre... View the full answer