Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment...
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Accounting
Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment has an estimated life of five years and an estimated residual value of $9,000. Sample's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2017, but production subsequent to 2017 will increase by 10,000 units each year. Required: 1. Calculate the depreciation expense, accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life. Enter all amounts as positive values.
Straight-line method:
Annual
Accumulated
Book
Year
Depreciation
Depreciation
Value
2017
2018
2019
2020
2021
Units-of-production method:
Annual
Accumulated
Book
Year
Depreciation
Depreciation
Value
2017
2018
2019
2020
2021
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