Whispering Company purchased equipment for $286,800 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $13,200. Estimated production is 48,000 units and estimated working hours are 20,000. During 2020, Whispering uses the equipment for 550 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Whispering is on a calendar-year basis ending December 31. (Round rate per hour and rate per unit to 2 decimal places, e. g. 5.35 and final answers to 0 decimal places, e. g. 45,892.) (a) Straight-line method for 2020 $enter a dollar amount (b) Activity method (units of output) for 2020 $enter a dollar amount (c) Activity method (working hours) for 2020 $enter a dollar amount (d) Sum-of-the-years'-digits method for 2022 $enter a dollar amount (e) Double-declining-balance method for 2021 $enter a dollar amount

(a) $8,600

(b) $5,700

(c) $7,524

(d) $51,300 and

(e) $67,219

Explanation:

Given information's are

value of Equipment = $286,800 on October 1, 2020.

Accounting base = on a calendar-year basis ending December 31

(a) Straight-line method for 2020

Depreciation = value of Equipment - salvage value ÷ life span of Equipment

Depreciation = $286,800 - $13,200 ÷ 8 = $34,400

For 3 months from October 1st to 31st December 2020

= $34,400 ÷ 12 × 3 = $8,600

(b) Activity method (units of output) for 2020

Depreciation =Amount of  Depreciation ÷ Total estimated production × unit produced during 2020

=  $273,600 ÷ 48,000 = $5.7 × 1000 = $5,700

(c) Activity method (working hours) for 2020

Depreciation =Amount of  Depreciation ÷ Total estimated working hours ×  working hours during 2020

=  $273,600 ÷ 20,000 = $13.68 × 550 = $7,524

(d) Sum-of-the-years'-digits method for 2022

Instead of adding the individual digits in the years of the asset's useful life, the following formula can be used to compute the sum of the digits: n(n+1) divided by 2, where n = the useful life in years

Depreciate Cost = Original Cost - Salvage Value = (Cost - Salvage)

Fraction for a Given Period = (Life - Period + 1) / ((Life × (Life + 1)) / 2)

depreciation for 2022 is $51,300

(e) Double-declining-balance method for 2021

Double declining balance method is a form of an accelerated depreciation method in which the asset value is depreciated at twice the rate it is done in the straight-line method

Double Declining Balance = 2 X Cost of the asset X Depreciation rate

 = 2 × $286,800 × 12.5 ÷100 =  $67,219

answer; importance to people; or acceptance;

answer; comparing the additional benefits and costs;