Equipment with a cost of $160,000 has an estimated residual value of $10,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the diminishing value method with a constant depreciation rate of 37.5% p.a. What is the amount of depreciation expense for the first full year, during which the equipment was used 3,300 hours? a. $60,000. b. $80,000. c. $56,250. d. $55,500.

Equipment with a cost of $160,000 has an estimated residual value of $10,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the diminishing value method with a constant depreciation rate of 37.5% p.a. What is the amount of depreciation expense for the first full year, during which the equipment was used 3,300 hours? a. $60,000. b. $80,000. c. $56,250. d. $55,500.

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Description: Equipment with a cost of $160,000 has an estimated residual value of $10,000 and anestimated life of 4 years or 12,000 hours. It is to be depreciated by the diminishing valuemethod with a constant depreciation rate of 37.5% p.a. What is the amount o

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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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Equipment with a cost of $160,000 has an estimated residual value of $10,000 and an
estimated life of 4 years or 12,000 hours. It is to be depreciated by the diminishing value
method with a constant depreciation rate of 37.5% p.a. What is the amount of depreciation
expense for the first full year, during which the equipment was used 3,300 hours?
a. $60,000.
b. $80,000.
c. $56,250.
d. $55,500.

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