Question 7 pts ABC purchased a new piece of equipment for $62,500. The estimated

Question

Question 7 pts ABC purchased a new piece of equipment for $62,500. The estimated residual value is $2,500 and the estimated useful life is 3 years or 100,000 miles. If the company uses straight-line depreciation, what is the depreciation expense, accumulated depreciation, and book value at the end of year 1? $20.00O: $20.000: $40,000 $20.833: $20,833: $41.667 $20,833: $20,833: $39.167 $20.00O: $20,000: $42,500 Question 8 ABC purchased a new truck for $62,500. The estimated residual value is $2,500 and the estimated useful life is 3 years or 100,000 miles. If the company uses units of production depreciation, what is the depreciation expense, accumulated depreciation, and book value at the end of year assuming the truck was driven 30,000 miles in year 1 $20,833; $20,833; $41,667 $18,000; $18,000; $44,500 $18,750; $18,750;$43,750 $18,000; $18,000; $42,000 Question 9 1 pts ABC purchased a new piece of equipment for $62,500. The estimated residual value is $2,500 and the estimated useful life is 3 years or 100,000 miles If the company uses double-declining balance, what is the depreciation expense, accumulated depreciation, and book value at the end of year 1? $41,667; $41,667; $20,833 $40,000; $40,000; $22,500 $40,000; $40,000; $20,000 $41,667; $41,667; $18,333

Explanation / Answer

7 Depreciation expense=(62500-2500)/3=$20000 Accumulated depreciation = $20000 Book value=62500-20000 = $42500 Option 4 is correct 8 Depreciation expense=(62500-2500)/100000*30000=$18000 Accumulated depreciation = $18000 Book value=62500-18000 = $44500 Option 2 is correct 9 Depreciation expense=62500*66.6667%=$41667 Accumulated depreciation = $41667 Book value=62500-41667=$20833 Option 1 is correct

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