accounting queston 2

label Accounting
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

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

Mar 6th, 2015

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.


Mar 7th, 2015

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