Question
1) Rollins Corp purchases a truck on January 1, 2018, for $124,000. The truck is expected to have a useful life of ten years and
1) Rollins Corp purchases a truck on January 1, 2018, for $124,000. The truck is expected to have a useful life of ten years and a residual value of $22,000. The company closes its books on December 31 each year. Under the double-declining balance method, what is the total amount of depreciation to be expensed for the truck during the 2019 fiscal year (year 2 of 10)?
2)Elliott Corp paid $700,000 to purchase equipment and $10,000 to have the equipment delivered to and installed in Elliott Corp's production facilities. Commercial use of the equipment began on May 1, 2018. The estimated residual value of the equipment is $10,000. The equipment is expected to be used a total of 40,000 hours throughout its estimated useful life of 4 years. Elliott Corp's fiscal year ended on October 31, 2018, and they had used the equipment a total of 5,000 hours prior to the year-end. Using the units- of- production method, what amount of depreciation expense would Elliott Corp report for this equipment in the income statement prepared for the year-ended October 31, 2018?
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