You are the accountant for Express Company. Express Company acquires an asset with a cost of $85,000
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Question:
1) Calculate depreciation expense for EACH of the first 3 years of the assets life using straight line and double-declining balance depreciation methods.
2) Assume instead that Express Company uses the units of production method to depreciate the asset. Total expected production of the asset is expected to be 2,500,000 units. What is depreciation for each of the first 3 years of the assets life if the units produced are year 1 – 350,000 units, year 2 – 150,000units , and 700,000 units in year 3?
3) What method of depreciation would you recommend to Express Company assuming that you wanted the method that best satisfied the matching principle?
Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd Canadian edition
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook
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