Units of production depreciation method

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Oil Company may calculate depreciation using the “units of production” method of depreciation. Consider a depreciable asset costing $100,000 that is expected to have a useful life of 120,000 units. Salvage value is estimated to be $20,000. Estimated annual production for the next seven years is 30,000, 30,000, 20,000, and 10,000 per year in each of the remaining four years. Determine the depreciation each year using the “units of production” depreciation method.

Reference no: EM13728185

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