Asked by
Calista Litke
on Dec 06, 2024
Verified
On January 1, 2010, Digger purchased some equipment for $19, 600.The anticipated life of the equipment was five years and residual value was estimated to be $3, 100.The machine was expected to produce 600, 000 units.In January of 2010, 25, 000 units were produced and production was doubled in February.The company uses the activity depreciation method.What is the amount of depreciation expense for the month of February?
A) $ 637.50
B) $1, 210.00
C) $2, 354.00
D) $1, 375.00
Activity Depreciation Method
A method of calculating the depreciation of an asset based on its usage, activities, or units of production rather than the passage of time.
Depreciation Expense
The allocated reduction in the carrying amount of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or other declines in value.
Estimated Life
The anticipated duration for which an asset is expected to be functional and economically viable, dictating its depreciation schedule.
- Distinguish and evaluate different approaches to depreciation.
- Implement insights on depreciation approaches in given contexts concerning the management of assets and decisions in finance.
Verified Answer
ZH
Learning Objectives
- Distinguish and evaluate different approaches to depreciation.
- Implement insights on depreciation approaches in given contexts concerning the management of assets and decisions in finance.