Assume that the double declining balance method

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On January 1, 2010, equipment is purchased for use in the production of steel pipes. The equipment cost $120,000 and is expected to be useful for 3 years. At the end of three years, the equipment is expected to have a salvage value of $30,000. During the three years of usage the equipment is expected to produce 6 million pipes. The calendar year is used for financial reporting.

1. Assume that the Units-of-Production method is used for equipment depreciation. If 4 million steel pipes are produced during 2010, how much depreciation expense is recognized in 2010?

2. Assume that the Straight-Line method is used for equipment depreciation. How much depreciation expense is recognized in 2012?

3. Assume that the Double Declining Balance method is used for equipment depreciation. How much depreciation expense is recognized in 2010?

Reference no: EM131259527

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