c.dase dobjectivity Questions 40 to 46 use the following information: Parham Ind

Question

c.dase dobjectivity Questions 40 to 46 use the following information: Parham Industries purchased an asset that had a total cost of 1 60, 000 and a residual value of $10,000. The asset is expected to service the business for a periodof 5years or produce a total of 600, 000 units. The machine was purchased January 1 of the current year and has been in service one complete y 40. What is the depreciable cost of the asset? $125,000 $150, 000o C. $130,000 d. $120,000 41. What is the amount of depreciation in Year two of the asset's life using the straight-line method? $30,000 b. $25,000 c. $20,000 d. $32,000 Page 16 of 39

Explanation / Answer

Depreciable cost of Asset after 0ne year Acquisition cost - Accumulated depreciation = Depreciated cost.

160000-10000/5= 30000

160,000-30,000=130,000c)

Amount of depreciation in year 2 SLM =30,000 (a)

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