WOW purchased equipment at the beginning of the fiscal year for $150,000. It is expected to have a useful life of 5 years, or 15,000 operating hours, and a residual value of $30,000.
1.Compute the depreciation for the first and second years of use by each of the following methods.
2. Then, prepare a short memo to the existing stockholders (no more than 50 words) explaining which one you would recommend they select.
(b) units-of-production (2,500 hours first year; 3,250 hours second year)
(c) declining-balance at twice the straight-line rate
(Round the answer to the nearest dollar. Remember to show ALL of your work)
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