Accumulated Depreciation is:

A contra asset on the balance sheet

A liability on the balance sheet

An expense on the income statement

None of the other answers are correct.

Wilson Company purchased equipment to be used in its factory. The equipment cost $32,000. Wilson estimates that the equipment will have a useful life of 8,000 hours after which it will have a $2,000 salvage value. During the first year, the machine was used for 2,500 hours. Using units of production depreciation, which of the following is correct regarding recording (journalizing) depreciation?

Debit Machine Expense

Credit Accumulated Depreciation

Debit Depreciation Expense

Credit Machine

Debit Depreciation Expense

Credit Accumulated Depreciation

Wilson Company purchased equipment to be used in its factory. The equipment cost $32,000. It will be used for 5 years, after which its residual value will be about $2,000. What is the depreciable basis of the equipment assuming the company uses straight-line depreciation?

$32,000

$30,000

$24,000

$29,500

What is the normal balance of accumulated depreciation?

Debit

Credit

It is a temporary account and has no normal balance.

It depends on how much the asset has been depreciated.

How is the book value (carrying value) of an asset computed?

Depreciable basis - Accumulated Depreciation

Original Cost - Accumulated Depreciation

Original Cost - Depreciation Expense

Depreciable basis - Depreciation Expense

Wilson Company purchased equipment to be used in its factory. The equipment cost $32,000. Wilson estimates that the equipment will have a useful life of 8,000 hours after which it will have a $2,000 salvage value. During the first year, the machine was used for 2,500 hours. Using units of production depreciation, what is the depreciation expense per machine hour?

		$3.75 per Machine Hour
		$4.00 per Machine Hour
		#3.50 per Machine Hour