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Calculate the depreciation expense accumulated depreciation

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Reference no: EM132494657

Gryffindor Company purchase factory equipment on January 1, 2019, for $60,000. The equipment has an estimated life of five years and an estimated residual value of $6,000. Gryffindor's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the assets. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2019, but production subsequent to 2019 will increase by 10,000 units each year.

Required:

Question 1. Calculate the depreciation expense accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life.

Question 2. Would the units-of-production method yield reasonable results in this situation? Explain.

Reference no: EM132494657

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