A corlcrete and rock crusher for demolition work has been purchased for $60,000, and it has an estimated sV of $10,000 at the end of its five-year life. Engineers have estimated that the following units of production (in m3 of crushed material) will be contracted over the next five years. EOY 14 m3 16,000 24.000 36,000 16,000 8,000 Using the units of production depreciation method, what is the BV at the end of year two? Select one: O a. $38,650 Ob $45,165 OC $42,500 d. $40,000
A corlcrete and rock crusher for demolition work has been purchased for $60,000, and it has an estimated sV of $10,000 at the end of its five-year life. Engineers have estimated that the following units of production (in m3 of crushed material) will be contracted over the next five years. EOY 14 m3 16,000 24.000 36,000 16,000 8,000 Using the units of production depreciation method, what is the BV at the end of year two? Select one: O a. $38,650 Ob $45,165 OC $42,500 d. $40,000
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 6CE
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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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