Copy Equipment Was Acquired at the Beginning of the Year

question 111

Essay

Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of 5 years. It is estimated that the machine has an estimated 1,000,000 copies. This year 315,000 copies were made. Determine the (a) depreciable cost, (b) depreciation rate, and (c) the units-of-production depreciation for the year.

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Definitions:

Accounts Payable

Liabilities of a business that are owed to creditors for goods or services purchased on credit.

Operating Activity

Transactions that relate to the primary business operations, such as revenue from sales and expenses for materials and labor.

Supplies

Items used in the operation of a business that are not directly tied to the products or services offered, such as office supplies.

Accounts Payable

This refers to the amounts owed by a company for goods or services that have been received but not yet paid for.