A machine with a cost of $190,000 has an estimated residual value of $19,000 and an estimated life of 4 years or 19,000 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 6,000 hours?

A machine with a cost of $190,000 has an estimated residual value of $19,000 and an estimated life of 4 years or 19,000 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 6,000 hours?

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

ChapterA: Methods Of Depreciation

Section: Chapter Questions

Problem 1P: A delivery van was bought for 18,000. The estimated life of the van is four years. The trade-in...

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

solve within 30 mins.

A machine with a cost of $190,000 has an estimated
residual value of $19,000 and an estimated life of 4
years or 19,000 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 6,000 hours?
a.$35,000
b.$54,000
c.$66,000
d.$6,000

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