I 71% DE Wed 2:28 AM OF +8 CALCULATOR PRINTER VERSION BACK NEXT > Multiple Choic

Question

I 71% DE Wed 2:28 AM OF +8 CALCULATOR PRINTER VERSION BACK NEXT > Multiple Choice Question 94 Your answer is incorrect. Try again. Equipment with a cost of $300000 has an estimated salvage value of $20000 and an estimated life of 4 years or 10000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2700 hours? TO $75000. O $70000. O $72500. O $75600. LINK TO TEXT Question Attempts: 2 of 3 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

Since the equipment is to be depreciated by straight line method, depreciation will be calculated based on straight line method and not as per hours of use method

Depreciation under straight line method

= (Purchase cost – Salvage value) / Useful life

= ($300,000 - $20,000) / 4

= $70,000 per year

So, as per above calculations, option B is the correct option

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