Question
A piece of equipment cost $1,000, has a salvage value of $100, and a 5-year life. Use this information for questions 2-8. 2. Depreciation expense
A piece of equipment cost $1,000, has a salvage value of $100, and a 5-year life.
Use this information for questions 2-8.
2. Depreciation expense per year using the straight line method is
A. $180
B. $200
C. $500
D. $240
3. Using the straight line method, what is accumulated depreciation after 3 years?
A. $600
B. $480
C. $400
D. $540
4. Using Sum-of-the-Years' Digits, depreciation expense is
A. $333 B. $500 C. $300 D. $240
5. Using Sum-of-the-Years' Digits, the book value of the equipment after 3 years is
A. $216
B. $280
C. $460
D. $340
6. Using Declining Balance, depreciation expense for year 1 is
A. $400 B. $300 C. $250 D. $500
7. Using Declining Balance, depreciation expense in year 5 is (round each year's depreciation to the nearest dollar)
A. $30
B. $52
C. $44
D.$100
8. Regardless of what method you use, the book value at the end of year 5 will be
A. less than $100
B. $100
C. $200
D. more than $100
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