Asked by
Rayan Khiyara
on Nov 18, 2024
Verified
A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-output method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?
A) $5,000
B) $35,000
C) $21,000
D) $45,000
Units-Of-Output Method
A depreciation method where the expense is based on the number of units produced or the machine's hours used, reflecting actual usage.
Depreciation
The systematic allocation of the cost of a tangible asset over its useful life, reflecting the loss in value over time.
Residual Value
Residual value refers to the predicted value of an asset at the conclusion of its lifespan.
- Familiarize yourself with the techniques of depreciation and how they distribute the financial burden throughout the asset's life span.
Verified Answer
BW
Learning Objectives
- Familiarize yourself with the techniques of depreciation and how they distribute the financial burden throughout the asset's life span.