Question

24. A machine with a cost of $75.000 has an estimated residual value of $5,000 and an estimated life of four ye or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance met a. $17.500 b. $37,500 c. $18,750 d. $16,667 25. The process of transferring the cost of metal ores and other minerals removed from the earth to an expo account is called a. depletion b. deferral c. amortization d. depreciation

Answer 1

| 24.) Double decilining balance method for 2nd year: cost of the machine $75,000 Residual value $5,000 No of years 4 years Straight line method of depreciation ($75,000 $5,000/4) $17500 rate of depreciation ($17,500/ $75,000) 23.33 % using double decilining balance method ($75,000 23.33%" 2) = $35,000 second year openeing balance will be ($75,000- $35,000) $40,000 Depreciation for second year will be ($40,000 23.33% 2) = $18,666.67 Therefore the option is C approximately. le., $18,750. 25.) Depletion the process of transferring the cost of metal ores and other mineral removed from earth to an expense account called depletion. Therefore the option is A. Depletion. 29.) The maurity value of the note: value of the note $80,000 Interest rate =5 % No of days 120 days Interest for the period $80,000* 5%* 120 /360 days - $1,333 Total Maturity value of the note will be ($1,333 +$ 80,000) $81,333 that is option C.