Question Details

Marlow Company purchased equipment 


Ex. 1
Marlow Company purchased equipment on January 1, 2010 for $70,000. It is estimated that the equipment will have a $5,000 residual value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 units over its 5-year life.
Instructions
Answer the following independent questions.
1.	Compute the amount of depreciation expense for the year ended December 31, 2010, using the straight-line method of depreciation.
2.	If 16,000 units of product are produced in 2010 and 24,000 units are produced in 2011, what is the book value of the equipment at December 31, 2011? The company uses the units-of-activity depreciation method.
3.	If the company uses the double-declining-balance method of depreciation, what is the balance of the Accumulated Depreciation—Equipment account at December 31, 2012?

Ex. 2
The December 31, 2010 statement of financial position of Cooper Company showed Equipment of €64,000 and Accumulated Depreciation of €18,000. On January 1, 2011, the company decided that the equipment has a remaining useful life of 6 years with a €4,000 residual value.  Instructions Compute the (a) depreciable cost of the equipment and (b) revised annual depreciation. 




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