Asked by
Taylor Kruse
on Nov 13, 2024
Verified
A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of five years or 15,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?
A) $5,000
B) $35,000
C) $21,000
D) $45,000
Units-of-Activity Method
A depreciation method that calculates an asset's expense based on its usage, activities, or units of production, rather than the passage of time.
Depreciation
The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.
Estimated Residual Value
The anticipated value of an asset at the end of its useful life.
- Achieve competency in the appraisal of depreciation through different procedures and acknowledge the determinants that drive the selection of methods.
- Gain insight into the idea of depreciable life, residual value, and the way they determine depreciation calculations.
Verified Answer
ST
Learning Objectives
- Achieve competency in the appraisal of depreciation through different procedures and acknowledge the determinants that drive the selection of methods.
- Gain insight into the idea of depreciable life, residual value, and the way they determine depreciation calculations.