Question

On June 1, 2021, Duncan Inc. purchased equipment for $74,000. The equipment

had an estimated life of 10 years, an estimated residual value of $8,000,
and was expected to be used to produce 120,000 units over its life. During
2021, the equipment was used to produce 11,000 units and during 2022 it was
used to produce 19,000 units.
Assume the company employs the units of production method of depreciation.
Calculate the amount of accumulated depreciation on the equipment shown in
the company's December 31, 2022 balance sheet.

Answer 1

The amount of accumulated depreciation on the equipment shown in

the company's December 31, 2022 balance sheet is $16,500.

Step-by-step explanation:

Depreciation Expense (Units of Production) = (Cost - Residual Value) × (Period`s Production / Total Estimated Production)

2021.

Depreciation Expense = ($74,000 - $8,000) × ( 11,000 units / 120,000 units )

= $6,050

2022

Depreciation Expense = ($74,000 - $8,000) × ( 19,000 units / 120,000 units )

= $10,450

Accumulated Depreciation - December 31, 2022

2021 = $6,050

2022 = $10,450

Total = $16,500