D Question 10 1 pts ABC purchased a new piece of equipment for $62.500. The esti

Question

D Question 10 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 straight-line depreciation, which of the following statements is true with respect to Year 2? O Accumulated Depreciation is equal to $41666 Depreciation Expense is $20.833 Book value is equal to $20,000 Accumulated Depreciation is equal to $40,000 D | Question 11 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, which of the following statements is true with respect to the end of Year 2? Accumulated Depreciation is equal to $55,556 Depreciation Expense is equal to $18.333 Book Value is equal to $2.500 Book Value is equal to $4.444 O O

Explanation / Answer

Q10) Depreciation expense per year = 62500-2500/3 = 20000 per year

Accumlated dep for two year = 20000*2 = 40000

Book value at the end of two year = 62500-40000 = 22500

so answer is d) Accumlated depreciation equal to $40000

Q11) Straight line rate = 100/3 = 33.33%

Double decline rate = 33.33%*2 = 66.66%

First year dep = 62500*2/3 = 41667

Second year dep = 62500*1/3*2/3 = 13889

Accumlated depreciation = 41667+13889 =55556

Book value = 62500-55556 = 6944

so answer is a) Accumlated depreciation is equal to $55,556

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