Question
Fabian Woodworks This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life
Fabian Woodworks This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2012, and was used 27,000 hours in 2012 and 26,000 hours in 2013. Refer to Fabian Woodworks. What amount will be reported as depreciation expense over the 5-year life of the equipment?
1A. A. $4,000
B. $8,000
C. $12,000
D. $10,000
1B. Refer to Fabian Woodworks. Based on the information presented above, what method of depreciation will maximize depreciation expense in 2012?
A. Straight-Line
B. Double-Declining Balance
C. Units - of production
D. All methods produce the same expense in 2012
1C. Refer to Fabian Woodworks. If the company uses the straight-line method of depreciation, what is the book value at December 31, 2014 (after 3 years)?
A. $6,000
B. $10,000
C. $8,000
D. $4,000
1D. Refer to Fabian Woodworks. If the company uses the units-of-production method, what is the depreciation rate per hour for the equipment?
A. $1.00
B. $1.10
C. $0.10
D. $0.12
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started