Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated

Question:

Bigbie Company purchased a depreciable asset for $600,000. The estimated is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?
a. $57,000
b. $62,700
c. $66,000
d. $570,000

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...