Problem #$3$

page $3$

On January $5,2005$ Lakeisha's Latex Products, Ltd$.$ purchased production equipment for which the following information is available::

Original cost.

Estimated residual value.......

Useful life in years...........

Useful life expressed in operating hours

$$498,000$

$$18,000$

$8$ years

$10,000$ hours

Calculate the following

$32$ The depreciable base.

$33$ The annual depreciation using the straight line method.

$34$ The accumulated depreciation at December $31,2006($end of second year$)$ if straight line $($S$/$L$)$ depreciation is used.

$35$ The book value of the equip. on Dec. $31,2006$ if S$/$L deprec. is used

$36$ The depreciation for year $2007$ assuming the equipment is sold on October $31,2007$ and the straight line method is used.

$37$ The book value of the equip. on Oct. $31,2007$ if S$/$L deprec. is used

$38$ The amount of the gain or loss $($INDICATE GAIN or LOSS and AMOUNT$)$ resulting if the equipment is sold for $-$

$$320,000$ on October $31,2007$ and S$/$L depreciation is used.

$39$ The SECOND year $(2006)$ depreciation if double declining balance is used.

$40$ The accumulated depreciation at December $31,2006($end of second year$)$ if double declining balance $($DDB$)$ is used.

$41$ The book value of the equipment on December $31,2006$ assuming double declining balance is employed.

$42$ The depreciation for year $2007$ assuming the equipment is sold on October $31,2007$ and double declining balance is used.

$43$ The gain or loss $($INDICATE WHICH$)$ which would result if the equip. is sold for $$320,000$ on October $31,2007$ and DDB is used.

$44$ The first year depreciation if units of output is used and the equip. is operated for $1400$ hours in $2005.$

$45$ The accumulated depreciation at December $31,2006($end of second year$)$ units of output is used and the equipment was operated for another $1500$ hours in $2006(2900$ hrs total$).$

$46$ The book value of the equip. on December $31,2006$ if units of output is used. $($Equipment operated $1400hrs$ in $2005,1500hrs$ in $2006)$

$47$ The depreciation for year $2007$ assuming the equipment is sold on September $30,2007$ and is operated for $1,200$ hours in $2007.($assuming the units of output method is used$)$

$48$ The book value of the equipment assuming the facts in #

$47$