Blue Jays Lawn Care purchased new excavating equipment at the beginning of Year 1. The equipment has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in Year 1. The equipment was used 20,000 hours during Year 1 and 24,000 ho during Year 2. The number of expected hours over five years is 100,000. Refer to Blue Jays Lawn Care. The company is comparing the straight-line and double-declining-balance depreciation methods. How will results over the life of the equipment compare under these methods? O The amount of accumulated depreciation over the life of the equipment will be higher under the double-declining-balance method by an amount equal to cost plus total depreciation. O The amount of accumulated depreciation over the life of the equipment will be higher under the double-declining-balance method by an amount equal to cost less total depreciation. O The amount of accumulated depreciation over the life of the equipment will be higher under the double-declining-balance method by an amount equal to the residual value of $7,000. O Both methods will result in the same total depreciation over the life of the equipment.

Blue Jays Lawn Care purchased new excavating equipment at the beginning of Year 1. The equipment has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in Year 1. The equipment was used 20,000 hours during Year 1 and 24,000 ho during Year 2. The number of expected hours over five years is 100,000. Refer to Blue Jays Lawn Care. The company is comparing the straight-line and double-declining-balance depreciation methods. How will results over the life of the equipment compare under these methods? O The amount of accumulated depreciation over the life of the equipment will be higher under the double-declining-balance method by an amount equal to cost plus total depreciation. O The amount of accumulated depreciation over the life of the equipment will be higher under the double-declining-balance method by an amount equal to cost less total depreciation. O The amount of accumulated depreciation over the life of the equipment will be higher under the double-declining-balance method by an amount equal to the residual value of $7,000. O Both methods will result in the same total depreciation over the life of the equipment.

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Description: Blue Jays Lawn Care purchased new excavating equipment at the beginning of Year 1. The equipment has a cost of $37,000, an estimated life of five years, and anestimated residual value of $7,000. A full year's depreciation expense is to be recorded i

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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