Posted: May 1st, 2016
Classic Ions, nc. purchased manufacturing equipment with an expected useful life of five years or 5,000 hours of usage. The equipment was purchased on Janruary 1, 2008, for $460,000. It is expected to have a salvage value of $60,000 at the end of 5 years. During 2008, the equipment was used for 1,200 hours. Assume the usage for the next four years will be 1,100 hours, 900 hours, 1,300 hours, and 500 hours respectively.
A. What is the amount of depreciation expense for each of the five years using the straight line method?
B. What is the amount of depreciation expense for each of the five years using the doubling declining method?
C. What is the amount of depreciation expense for each of the five years using the production method?
Food to Go Delivery Service disposed of one of their delivery cars after using the car for 2 years. The records of the company provide the following informatiom:
Delivery car cost ,000
Accumulated depreciation $10,000
Calculate the gain or loss on the disposal of the car for each of the following independent situations:
A. Food to Go sold the car to another company for $22,000
B. Food to go sold the car to another company for $17,000
C. The car was stolen from the parking lot and no insurance was carried on it for theft.
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