What is the depreciation expense and book value

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Reference no: EM132760812

Joseph Corp. purchased equipment costing $50,000. It is estimated to have a life of 5 years or 2,000 machine hours. The residual value is $10,000. The actual hours used by the equipment is:

Year 1 500 hours
Year 2 1,200 hours
Year 3 400 hours

Required:

Problem 1: What is the depreciation expense and book value for the first three years, using:

Double declining balance
Activity method

Problem 2: Assume Joseph Corp. sold the equipment at the end of Year 3 for $10,500. Prepare the necessary general journal entry, assuming that the activity method was used.

Reference no: EM132760812

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