Question

Cutter Enterprises purchased equipment for $84,000 on January 1, 2016. The equipment is expected to have a five-year life and a residual value of $6,300. Using the sum-of-the-years-digits method, depreciation for 2017 and book value at December 31, 2017, would be (Do not round depreciation rate per year): Multiple Choice O $22,400 and $27,300. O $20,720 and $37,380. O $20,720 and $31,080. O $22,400 and $33,600.

Answer 1

Option B is correct

Value of Equipment $84,000 Residual value. $ 6,300 $771700. Depreciation base =. Depreciation Remaining tife. Depreciation Expense Year Depreciation fraction Book value base 25,900 5l15 58,100 41700 2016 కక 371380 20,730 4/15 77i700 2017 1,540 21,840. 15,540 3/15 3. 771700 2018 11,480 10,360 215 2. 6,300 S1180 15 77700 20g0. 15

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