Question

8. A company purchased a machine for $190.000. The machine has a useful life of 8 produce 750,000 units over its useful life. Determine depreciation expense when output is 109,000 units A. $25,200. 8. $26,160 С. $ 26,660. D. $27,613. E. $53,160 years, a residual value of $10,000, and can deprecilation method in which a plant asset's depreciation depreciation rate to the asset's beginning-of-period book value is called A. Book value depreciation B. Declining-balance depreciation. C. Straight-ine depreciation. D. Units-of-production depreciation. E. Modified accumulated depreciation method . A expense for a period is determined by applying a constant 10. Information on a depreciable asset owned by Wilson Engineering is as follows: Purchasc date January 1, 2008 Purchase price Salvage value Useful life Depreciation mothod 545,000 3 5,000 8 years straigh-line If the asset is sold on July 1, 2012 for $20,000, the journal entry to record the sale will include A A credit to cash for $20,000. 8 A debit to accumulated depreciation for $22,500. C A debit to loss on sale for $10,000. D. A credit to loss on sale for $10,000 E. A debit to gain on sale for $2,500 equipment on Jan 1, 2005 for $48,000. The equipment will have a $6,000 salvage value at the end of its book value of the asset at December 31, 2005. 10-year life. Using the straight-line method of depreciation to determine the A. $4,800 B. $4,200 C. 43,800 D. $3,600 E. None of the above 12. Determine the remaining life of ABC's equipment given the following. Equipment cost $30,000. Estimated salvage value $6, Annual depreciation expense $3,000. Balance in the Accumulated Depreciation account at the end of the year is $9,000. A. 10 years B. 8 years C. 5 years. D. 3 years E. None of the above. 13. Which depreciation method or methods, take the salvage value of the asset into consideration when computing the annual depreciation expense? A. Straight-line. B. Units of Production. C. Declining Balance. D. A and C E. A and B.

Answer 1

8)Depreciation per unit=(cost-residual)/no of units
=(190000-10000)/750000
=0.24
depreciaiton when 109000 units output
=0.24*109000=26160
it is option B

9)It is option B as it is the definition of declining balance method

10)the asset is used for total period Jan 1st 2008 to July 1st 2012 and it is total 4 and half years
the depreiciation of asset
=(cost-salvage)/years
=(45000-5000)/8=5000
for 4.5 years the depreciation=5000*4.5=22500
the book value of asset= cost-depreciation=45000-22500=22500
and this is sold for 20000 means there is loss of 2500
the jounrnal entries are:
cash(db)20000
loss on sale(db)2500
accumulated depreciation(db)22500
equipment(cr)45000
it is option B

11)the asset used for one year and the depreciation
=(cost-salvage)/years
=(48000-6000)/10=4200
Depreciaiton for year=4200
book value= cost-depreciation
=48000-4200=43800
it is option C

12)life of asset=(cost-salvage)/annual depreciation
=(30000-6000)/3000=8
it is option B

13)it is option E, since the declining balance does not consider it