accounting queston 2

### Question Description

I’m working on a Accounting question and need guidance to help me study.

i am stuck on part c of this problem. here are pics of the problem

http://imgur.com/F9A39bs

http://imgur.com/OtffUYy

first pic is the info u need to solve the problem. 2nd pic is the actual problem part C

please include all work/how u got the answers

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b) Under Units-of-production depreciation method,

Annual depreciation expense = (Cost of asset-residual value) X Actual production/ Estimated total production

Here, Original cost= \$42,000; Salvage Value= \$6,000 and is expected to produce 2,000,000.

So, depreciation per unit= (42000-6000)/2000000= 0.018.

So, the units-of-production depreciation schedule of the asset

 Units of production Depreciation cost per unit Depreciation expense Accumulated depreciation Book value at end of year 42000 550,000 0.018 9,900 9,900 32,100 480,000 0.018 8,640 18,540 23,460 380,000 0.018 6,840 25,380 16,620 390,000 0.018 7,020 32,400 9,600 240,000 0.018 4,320 36,720 5,280

So, the answer is \$36,720.

c) In DDB, as salvage value = \$6000

& selling price= \$5200

So, Loss= 6000-5200=\$800.

In Units of production, actual salvage value= \$5280

As selling price= \$5200, So, loss= 5280-5200=\$80.

UCLA
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