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7 September, 16:25

Sophia Company purchased equipment costing $120,000. The equipment has a residual value of $20,000 and an estimated useful life of 50,000 units. Using the units-of-activity method, calculate the depreciation for year 1 and year 2, assuming that the company produced 10,000 units in year 1 and 23,000 units in year 2.

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  1. 7 September, 19:12
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    Year 1 : $20000

    Year 2 : $460000

    Explanation:

    Year 1 calculation:

    120000-20000/50000*10000 = $20000

    Year 2 calculation:

    120000-20000/50000*23000=$46000
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