Redeker Company Purchased Equipment on January 1, 2013, for $90,000

question 42

Essay

Redeker Company purchased equipment on January 1, 2013, for $90,000. It is estimated that the equipment will have a $5,000 salvage 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, 2013, using the straight-line method of depreciation.
2. If 16,000 units of product are produced in 2013 and 24,000 units are produced in 2014, what is the book value of the equipment at December 31, 2014? 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, 2015?

---

Definitions:

Journal Entries

Recorded transactions in the financial books of a business that detail the financial activities and their impact on the accounts.

Office Supplies

Items and materials used in offices for routine tasks and operations, such as paper, pens, staplers, and ink cartridges.

Physical Count

The manual process of counting all physical inventory items to verify quantities and condition, often for verification against accounting records.

Supplies On Hand

Refers to the inventory of supplies that a business currently has available for use at any given time.