Equipment with a cost of $143,431 has an estimated residual value of $8,131 and an estimated life of 6 years or 12,405 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,454 hours? b. $6.00 c. $22,550.00 d. $37,672.41
Equipment with a cost of $143,431 has an estimated residual value of $8,131 and an estimated life of 6 years or 12,405 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,454 hours? b. $6.00 c. $22,550.00 d. $37,672.41
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 5MC: A machine with a 4-year estimated useful life and an estimated 15% residual value was acquired on...
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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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Transcribed Image Text:Equipment with a cost of $143,431
has an estimated residual value of
$8,131 and an estimated life of 6
years or 12,405 hours. It is to be
depreciated by the straight-line
method. What is the amount of
depreciation for the first full year,
during which the equipment was used
3,454 hours?
b. $6.00
c. $22,550.00
d. $37,672.41
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