Reference no: EM132566970

Question - Company purchased an asset for $ 215,000. Its useful life is 5 years and residual value at the end of 5 years will be 15,000.It is expected to produce 450,000 units during its useful life and produced 100,000 units in first year and 75,000 units in second year and 120,000 units in third year, 90,000 units in fourth year and remaining units in last year.

Requirements -

1) Calculate depreciation expenses for 5 years using straight line depreciation, DDB, sum of years' digit method and unit of production method.

2) Assuming That asset was sold at the end of 3rd year for 35,000. Provide journal entry on the sales date under straight line, DDB, sum of years' digit method and unit of production method.