Question

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that is proportional to the use of the asset is: O declining-balance method straight-line method O units-of-output method direct-units method

Answer 1

Question No (5) Question No (1) Units of Output Method. Question No (2) Cost of Machine Less : Residual Value Depreciable Cost Useful life Depreciation Expense $ 120,000 $ (30,000) $ 90,000 $ 75,000 4 Years Cost of Machine Useful Life Double Declining Depreciation Rate : 100%/4 years * 200% $ 30,000 50% $ 15,000 Depreciation expense for year 2019: 30,000*6/12 Depreciation Expense for Year (1) 75000*50% $ 37,500 Question No 6) Question No (3) Option (b) is Correct Sale Value Less : Book Value (30000-28000) Gain Option (b) is Correct $ 3,500 $ (2,000) $ 1,500 Calculate the book value of equipment as of the end of Year 4 , compute the depreciation expense for year 5 using revised amounts of useful life and residual value Do not change prior year previously recorded depreciation Question No (7) Option (A) is Correct Question No (4) A Higher Ratio Indicates more efficient use of fixed assets Cost of Machine Less : Residual Value Depreciable Cost Useful life Depreciation Expense $ 120,000 $ (30,000) $ 90,000 3 $ 30,000 Depreciation expense for year 2019: 30,000*6/12 $ 15,000