use the following information for the quick studies below. (algo)\nthe following information applies to the…

use the following information for the quick studies below. (algo)\nthe following information applies to the questions displayed below.\nequipment costing $60,000 with a 4 - year useful life and an estimated $10,000 salvage value is acquired and started operating on january 1. the equipment is estimated to produce 5,000 units of product during its life. it produced 750 units in the first year.\nqs 10 - 8 (algo) recording depreciation journal entries lo p1\nrecord the journal entries for equipment depreciation for the first year under straight - line, units - of - production, and double - declining - balance.\nview transaction list\njournal entry worksheet\nrecord depreciation for the first year under straight - line.

use the following information for the quick studies below. (algo)\nthe following information applies to the questions displayed below.\nequipment costing $60,000 with a 4 - year useful life and an estimated $10,000 salvage value is acquired and started operating on january 1. the equipment is estimated to produce 5,000 units of product during its life. it produced 750 units in the first year.\nqs 10 - 8 (algo) recording depreciation journal entries lo p1\nrecord the journal entries for equipment depreciation for the first year under straight - line, units - of - production, and double - declining - balance.\nview transaction list\njournal entry worksheet\nrecord depreciation for the first year under straight - line.

Answer

Explanation:

Step1: Calculate straight - line depreciation

The formula for straight - line depreciation is $\frac{Cost - Salvage\ value}{Useful\ life}$. Cost = $60000$, Salvage value = $10000$, Useful life = 4 years. So, $\frac{60000 - 10000}{4}=\frac{50000}{4}=12500$. The journal entry for straight - line depreciation: Debit Depreciation Expense - Equipment $12500$ Credit Accumulated Depreciation - Equipment $12500$

Step2: Calculate units - of - production depreciation

First, find the depreciation per unit. Depreciation per unit=$\frac{Cost - Salvage\ value}{Total\ units\ of\ production}=\frac{60000 - 10000}{5000}=\frac{50000}{5000}=10$ per unit. Depreciation expense for the first year = Depreciation per unit×Units produced in the first year = $10\times750 = 7500$. The journal entry for units - of - production depreciation: Debit Depreciation Expense - Equipment $7500$ Credit Accumulated Depreciation - Equipment $7500$

Step3: Calculate double - declining - balance depreciation

The straight - line depreciation rate = $\frac{1}{Useful\ life}=\frac{1}{4}=0.25$. The double - declining - balance rate = $2\times0.25 = 0.5$. Depreciation expense for the first year = Book value at the beginning of the year×Double - declining - balance rate. Book value at the beginning of the year = $60000$. So, Depreciation expense = $60000\times0.5 = 30000$. The journal entry for double - declining - balance depreciation: Debit Depreciation Expense - Equipment $30000$ Credit Accumulated Depreciation - Equipment $30000$

Answer:

Straight - line: Debit: Depreciation Expense - Equipment $12500$ Credit: Accumulated Depreciation - Equipment $12500$

Units - of - production: Debit: Depreciation Expense - Equipment $7500$ Credit: Accumulated Depreciation - Equipment $7500$

Double - declining - balance: Debit: Depreciation Expense - Equipment $30000$ Credit: Accumulated Depreciation - Equipment $30000$