A business purchased a machine that had a total cost of $220,000 and a residual value of $20,000. The asset is expected to service the business for a period of 10 years or produce a total of 1,000,000 units. The machine was purchased on January 1st of the current year and has been in service for one complete year. Now assume the business uses the units-of-production method. If the asset produces 250,000 units in year one and 200,000 units in year two, what is the book value at the end of year two? A. $130,000 B. $110,000 C. $90,000 D. $121,000

A business purchased a machine that had a total cost of $220,000 and a residual value of $20,000. The asset is expected to service the business for a period of 10 years or produce a total of 1,000,000 units. The machine was purchased on January 1st of the current year and has been in service for one complete year. Now assume the business uses the units-of-production method. If the asset produces 250,000 units in year one and 200,000 units in year two, what is the book value at the end of year two? A. $130,000 B. $110,000 C. $90,000 D. $121,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 4RE: Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000...

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