On January 1, 2012, Bushong Company purchased equipment at a cost of $12,600. The equipment had...

On January 1, 2012, Bushong Company purchased equipment at a cost of $12,600. The equipment had an estimated useful life of 6 years or 30,000 hours. The equipment will have a $1,200 salvage value at the end of its life. The equipment was used 6,500 hours in 2012. The depreciation expense for the year ending December 31, 2012, using the units-of-production method would be:

Expert Solution

Annual depreciation=(Cost-Residual value)/Useful Life

=(12600-1200)/30,000

=$0.38 per hour

Hence depreciation expense would be=0.38*6500

=$2470

ekkarill92 answered 2 years ago

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