Rebe is looking over two sets of calculations done by a new employee. Set A presents the original cost of a vehicle to be $60,000 and the depreciable cost to be $30,000. Set B presents the depreciable cost of a machine to be $100,000 and the original cost of the machine to be $80,000. Are these calculations correct? O No, Set A is incorrect as the depreciable cost cannot possibly be lower than the original cost of the asset. O Yes, both Set A and Set B are likely correct, but to know for sure the salvage value of the assets would also need to be known. O Yes, both Set A and Set B are likely correct, but to know for sure the estimated useful life would also need to be known. O No, Set B is incorrect as the depreciable cost cannot possibly be higher than the original cost of the asset.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Depreciation Calculations Review**

Rebe is reviewing two sets of calculations done by a new employee. In Set A, the original cost of a vehicle is $60,000, and the depreciable cost is stated as $30,000. Set B presents the depreciable cost of a machine as $100,000, with its original cost being $80,000. Are these calculations correct?

- **Selected Answer:** No, Set A is incorrect as the depreciable cost cannot possibly be lower than the original cost of the asset.

- **Other Choices:**
  - Yes, both Set A and Set B are likely correct, but to ensure accuracy, knowing the salvage value of the assets would also be necessary.
  - Yes, both Set A and Set B are likely correct, but the estimated useful life of the assets would also need to be known for certainty.
  - No, Set B is incorrect as the depreciable cost cannot possibly be higher than the original cost of the asset.
Transcribed Image Text:**Depreciation Calculations Review** Rebe is reviewing two sets of calculations done by a new employee. In Set A, the original cost of a vehicle is $60,000, and the depreciable cost is stated as $30,000. Set B presents the depreciable cost of a machine as $100,000, with its original cost being $80,000. Are these calculations correct? - **Selected Answer:** No, Set A is incorrect as the depreciable cost cannot possibly be lower than the original cost of the asset. - **Other Choices:** - Yes, both Set A and Set B are likely correct, but to ensure accuracy, knowing the salvage value of the assets would also be necessary. - Yes, both Set A and Set B are likely correct, but the estimated useful life of the assets would also need to be known for certainty. - No, Set B is incorrect as the depreciable cost cannot possibly be higher than the original cost of the asset.
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