On January 1, 2024, Marigold Corp. purchased equipment for $52000. It was expected to last five years, after which it will be sold for $5000. It is expected to be used for a total of 9400 machine hours, and was used for 750 hours during the year ended December 31, 2024. The depreciation expense for 2024 using the units-of-production method will be $4149. O $3750. O $10650. O $9400.
On January 1, 2024, Marigold Corp. purchased equipment for $52000. It was expected to last five years, after which it will be sold for $5000. It is expected to be used for a total of 9400 machine hours, and was used for 750 hours during the year ended December 31, 2024. The depreciation expense for 2024 using the units-of-production method will be $4149. O $3750. O $10650. O $9400.
Chapter1: Financial Statements And Business Decisions
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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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On January 1, 2024, Marigold Corp. purchased equipment for $52000. It was expected to last five years, after which it will be sold for
$5000. It is expected to be used for a total of 9400 machine hours, and was used for 750 hours during the year ended December 31,
2024. The depreciation expense for 2024 using the units-of-production method will be
O $4149.
O $3750.
O $10650.
O $9400.
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