If 40,000 units were produced in 20X1 and 60,000 were produced in 20X2, what amount of accumulated depreciation is reported at the end of 20X2 using the activity-based method (rounded to the nearest whole dollar if necessary)? Select one: a. $60,000 b. $100,000 c. $150,000 d. $158,333 e. $90,000
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.
On January 1, 20X1, GBP Corp. purchased a machine that cost $950,000 and had a residual value of $50,000. The machine is expected to produce 600,000 units over its service period.
If 40,000 units were produced in 20X1 and 60,000 were produced in 20X2, what amount of
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