Asked by Hayden Brown on May 16, 2024
Verified
Determine the machines' second year depreciation under the straight-line method.
A) $16,900.
B) $16,000.
C) $17,400.
D) $18,379.
E) $20,880.
Straight-line Method
A method of calculating depreciation whereby an asset's cost is evenly spread over its useful life.
Salvage Value
The estimated residual value of an asset at the end of its useful life, often considered for depreciation calculations.
Useful Life
The estimated duration a fixed asset is expected to be economically usable, with normal repairs and maintenance, for it to generate revenue.
- Invoke the straight-line, double-declining-balance, and units-of-production procedures in the calculation of depreciation.
Verified Answer
MM
Maurisio MartinezMay 19, 2024
Final Answer :
B
Explanation :
Straight-line method formula: (Cost - Salvage Value) / Useful Life
Depreciation per year = ($87,000 - $7,000) / 5 years = $16,000 per year
Depreciation for the second year = $16,000
Therefore, the correct answer is B) $16,000.
Depreciation per year = ($87,000 - $7,000) / 5 years = $16,000 per year
Depreciation for the second year = $16,000
Therefore, the correct answer is B) $16,000.
Learning Objectives
- Invoke the straight-line, double-declining-balance, and units-of-production procedures in the calculation of depreciation.