question archive 1) A factory machine was purchased for $391000 on January 1, 2021
1) A factory machine was purchased for $391000 on January 1, 2021
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1) A factory machine was purchased for $391000 on January 1, 2021. It was estimated that it would have a $79000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 36000 hours in the 5 years. The company ran the machine for 3600 actual hours in 2021. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2021 would be
$31200.
$62400.
$79000.
$39100.
2) A plant asset was purchased on January 1 for $57000 with an estimated salvage value of $12000 at the end of its useful life. The current year's Depreciation Expense is $5000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $20000. The remaining useful life of the plant asset is
5.0 years.
6.4 years.
114 years.
9.0 years
3) Concord Corporation bought equipment on January 1, 2021. The equipment cost $351000 and had an expected salvage value of $50100. The life of the equipment was estimated to be 6 years. The depreciation expense using the straight-line method of depreciation is
$66850.
$68850.
$50150.
None of these answer choices are correct
4) Sunland Corporation bought equipment on January 1, 2021. The equipment cost $402000 and had an expected salvage value of $61200. The life of the equipment was estimated to be 6 years. Assuming straight-line deprecation, the book value of the equipment at the beginning of the third year would be
$402000.
$170400.
$288400.
$113600
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Answer:
1. Depreciation Expense = Cost - salvage value
= $391,000 - $79,000
= $312,000
Depreciation Expense for 2021 = (Actual hours in 2021 / Total hours) * Depreciation
= (3,600 / 36,000) * $312,000
= $31,200
$31,200 is the correct answer.
2.
Depreciation expense = Cost - salvage value.
= $57,000 - $12,000
= $45,000
Depreciation expense per year = $5,000
Accumulated Depreciation after 4 years = $5,000 * 4
= $20,000
No. Of year = Depreciation expense / Depreciation expense per year
= $45,000/ $5,000
= 9 years
Remaining useful life = 9 years - 4 years
= 5 years
5 years is the correct answer
3.
Depreciation expense (straight line method)
= (Cost - salvage value) / Years
= ($351,000 - $50,100) / 6 years
= $50,150 is the correct answer
$50,150 is the correct answer.
4.
Depreciation expense (Straight line depreciation)
= (Cost - salvage value) / Years
= ($402,000 - $61,200) /6
= $56,800
Accumulated Depreciation for 2 years = $56,800 * 2
= $113,600
Book value at the beginning of the third year = Cost - Accumulated depreciation for 2 years
= $402,000 - $113,600
= $288,400
$288,400 is the correct answer.
