Aliquippa Co

question 189

Essay

Aliquippa Co.purchased equipment at the beginning of 2016 for $60,000.In addition, Aliquippa paid $2,000 for delivery of the equipment to its plant and $1,000 for installation of the equipment.The equipment has an estimated residual value of $7,000 and an estimated life of 7 years or 70,000 hours of operation.Aliquippa is looking at alternative depreciation methods for the equipment.Calculate the following: A. The depreciation expense for the year 2016 using the straight-line depreciation method.
B. The total accumulated depreciation at December 31,2017 , using the units-of-production depreciation method. Assume that the equipment is operated for 15,000 hours in 2016 and 12,000 hours in 2017.

C. The book value of the equipment at December 31, 2016, using the double-declining-balance depreciation method.
D. Which of the above methods is considered accelerated?
E. What are the advantages of using an accelerated depreciation method as compared to the straight-line method for lowering taxes early in the life of the equipment?

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Definitions:

Schema

A schema is a cognitive framework or concept that helps organize and interpret information in the world, guiding our expectations and understanding of experiences.

Human Mortality

The condition of being susceptible to death; the statistical study of human deaths in a population.

Lateralization

Literally, “sidedness,” referring to the specialization in certain functions by each side of the brain, with one side dominant for each activity. The left side of the brain controls the right side of the body, and vice versa.

Human Mortality

The state of being subject to death; the recognition of this condition affects individual and societal behavior and beliefs.