Calculate the amount of depreciation to report during the year ended December 31 for equipment that was purchased at a cost of $43,000 on October 1. The equipment has an estimated residual value of $3,000 and an estimated useful life of five years or 20,000 hours.
Assume the equipment was used for 1,000 hours from October 1 to December 31 and the company uses (a) straight-line, (b) double-declining-balance, or (c) units-of-production depreciation

Calculate the amount of depreciation to report during the year ended December 31 for equipment that was purchased for $43,000 on October 1. The equipment has an estimated residual value of $3,000 and an estimated useful life of five years or 20,000 hours.

Assume the equipment was used for 1,000 hours from October 1 to December 31.

A) Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (43,000 - 3,000)/5=8,000

Year 1 depreciation= 8,000/12*3= 2,000

B) Annual depreciation= 2*[(original cost - residual value)/estimated life (years)]

Year 1= 16,000/12*3= 4,000

C) Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= 40,000/20,000= 2

Year 1= 2*1000hs= 2,000