On January 1, 2018, Anvil Corp. purchased equipment for $60,000. It was expected to last 5...
On January 1, 2018, Anvil Corp. purchased equipment for $60,000. It was expected to last 5 years, after which it will be sold for $5,000. It is expected to be used for a total of 10,000 machine hours, and was used for 750 hours during the year ended December 31, 2018. The depreciation expense for 2018 using the units-of-production method will be
Question 31 options:
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$4,125.00 |
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$11,000.00 |
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$4,500.00 |
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$12,250.00 |
Homework Answers
Answer:- $4,125
Reason:
Depreciable value of machinery = Cost - Salvage value = $60,000 - $5,000 = $55,000
Depreciation per machine hour = Depreciable value of machinery / Estimated total machine hours = $55,000 / 10,000 machine hours = $5.50
Depreciation expense for 2018 = Depreciation per machine hour x Machine hours used in 2018 = $5.50 x 750 hours = $4,125
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