Limestone Construction purchased a concrete mixer on

July 15 2015 #6454

Limestone Construction purchased a concrete mixer on July 15, 2015. Company officials
revealed the following information regarding this asset and its acquisition:Purchase price . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $210,000Residual value . . . . . . . . . . .
. . . . . . . . . . . . . . . . .. ... . . . . . . . . . . . . . . . . . . . . . . . $20,000Estimated useful life . . . . . . . . . . .
. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 yearsEstimated service hours . . . . . . . . . . . .
. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000Estimated production in units . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . 375,000 yardsThe concrete mixer was operated by construction
crews in 2015 for a total of 6,500 hours, and it produced 49,500 yards of concrete.It is company
policy to take a half-year's depreciation on all assets for which it used the straight-line or double-
declining-balance depreciation method in the year of purchase.Calculate the resulting
depreciation expense for 2015 under each of the following methods, and specify which method
allows the greatest depreciation expense.1. Double-declining-balance2. Productive-output3.
Service-hours4. Straight-lineView Solution:
Limestone Construction purchased a concrete mixer on July 15 2015

ANSWER
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