Reference no: EM132438221
Question - Glans Company purchased equipment on account on April 6, 2019, at an invoice price of $442,000.
On April 7, 2019, it paid $4,000 for delivery of the equipment.
A one-year, $3,000 insurance policy on the equipment was purchased on April 9, 2019.
On April 22, 2019, Glans paid $6,000 for installation and testing of the equipment.
The equipment was ready for use on May 1, 2019.
The equipment's useful life will be 4 years, with a residual value of $20,000.
It also estimates that, in terms of activity, the equipment's useful life will be 150,000 units.
Glans has an April 30 fiscal year end.
Assume that actual usage is as
|
Units
|
Year Ended April 30
|
|
22,600
|
2020
|
|
45,600
|
2021
|
|
49,700
|
2022
|
|
32,200
|
2023
|
a. Determine the cost of the equipment
b. Prepare depreciation schedules for the life of the asset under the following depreciation methods:
Straight-line.
Double diminishing-balance.
Units-of-production.