The completed financial statement columns of the worksheet for Woods Company, Inc. are shown below
December 29, 2017
Diversity in Education
December 29, 2017

The cost of equipment purchased by Charleston, Inc., on June 1, 2014, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 525,000 units. During 2014, the machine was operated 6,000 hours and produced 55,000 units. During 2015, the machine was operated 5,500 hours and produced 48,000 units.

Question
(Depreciation for Partial Periods–SL, Act., SYD, and Declining-Balance)

The cost of equipment purchased by Charleston, Inc., on June 1, 2014, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 525,000 units. During 2014, the machine was operated 6,000 hours and produced 55,000 units. During 2015, the machine was operated 5,500 hours and produced 48,000 units.

Instructions

Compute depreciation expense on the machine for the year ending December 31, 2014, and the year ending December 31, 2015, using the following methods.

(a)Straight-line.

b)Units-of-output.

(c)Working hours.

(d)Sum-of-the-years’-digits.

(e)Declining-balance (twice the straight-line rate).

 

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