A machine with a cost of $480,000 has an estimated salvage value of $30,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? Select one: a. $160,000 b. $130,000 c. $90,000 d. $150,000
A machine with a cost of $480,000 has an estimated salvage value of $30,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? Select one: a. $160,000 b. $130,000 c. $90,000 d. $150,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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A machine with a cost of $480,000 has an estimated salvage value of $30,000 and an estimated useful life of 5 years or 15,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?
Select one:
a. $160,000
b. $130,000
c. $90,000
d. $150,000
Drago Company purchased equipment on January 1, 2016, at a total invoice cost of $1,200,000. The equipment has an estimated salvage value of $30,000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2017, if the straight-line method of depreciation is used?
Select one:
a. $234,000
b. $468,000
c. $240,000
d. $480,000
Sargent Corporation bought equipment on January 1, 2017. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. Assuming straight-line deprecation, the book value of the equipment at the beginning of the third year would be
Select one:
a. $150,000.
b. $260,000.
c. $360,000.
d. $100,000.
Sargent Corporation bought equipment on January 1, 2017. The equipment cost $360,000 and had an expected salvage value of $60,000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is
Select one:
a. $300,000.
b. $200,000.
c. $360,000.
d. $50,000.
The term "receivables" refers to
Select one:
A. merchandise to be collected from individuals or companies.
B. cash to be paid to creditors.
C. cash to be paid to debtors.
D. amounts due from individuals or companies.
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