On April 30. Year 1 Tilton Products purchased machinery for $176,000. The useful life of this machinery is estimated at 8 years, with an $16,000 residual value. Titon uses a calendar year-end for financial reporting Assume that in its financial statements, Tilton Products uses the 200%-declining-balance method and the half-year convention. Depreciation expense in Year 1 and Year 2 will be: Multiple Choice $44,000 in Year 1 and $33,000 in Year 2 $22.000 in Year 1 and $38.500 in Year 2 $44,000 in Year 1 and $38.500 in Year 2. $22.000 in Year 1 and $44,000 in Year 2 26
On April 30. Year 1 Tilton Products purchased machinery for $176,000. The useful life of this machinery is estimated at 8 years, with an $16,000 residual value. Titon uses a calendar year-end for financial reporting Assume that in its financial statements, Tilton Products uses the 200%-declining-balance method and the half-year convention. Depreciation expense in Year 1 and Year 2 will be: Multiple Choice $44,000 in Year 1 and $33,000 in Year 2 $22.000 in Year 1 and $38.500 in Year 2 $44,000 in Year 1 and $38.500 in Year 2. $22.000 in Year 1 and $44,000 in Year 2 26
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text:On April 30. Year 1 Tilton Products purchased machinery for $176,000. The useful life of this machinery is estimated at 8 years, with an $16,000 residual value. Titon uses a calendar
year-end for financial reporting
Assume that in its financial statements, Tilton Products uses the 200%-declining-balance method and the half-year convention. Depreciation expense in Year 1 and Year 2 will be:
Multiple Choice
$44,000 in Year 1 and $33,000 in Year 2
$22.000 in Year 1 and $38,500 in Year 2
$44,000 in Year 1 and $38.500 in Year 2.
$22.000 in Year 1 and $44,000 in Year 2
26
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