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Question - Red Brick Company purchased a front-end loader and tractor for $82,000 on April 1 of year 1. The tractor has an estimated useful life of six years or 25,800 hours and a residual value of $2,000. Listed in the chart below is the number of hours the tractor and front-end loader were used during year 1 through 7.
Year
# of hours used
1
3,990
2
4,270
3
4
4,150
5
4,245
6
4,075
7
1,080
Required -
a) Calculate depreciation using the straight line method for years 1 through 7.
b) Calculate depreciation using units of production method for years 1 through 7.
c) Calculate depreciation using declining balance method for years 1 through 7.
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