Question
Here is the information relating to the equipment of the company Production Inc: Purchase on January 1 X5 $ 100,000 Estimated useful life 5 years
Here is the information relating to the equipment of the company Production Inc:
Purchase on January 1 X5 $ 100,000 Estimated useful life 5 years Estimated residual value $ 10,000 Total hours of intended use 10,000 hours Number of hours of use in X5 3,000 hours Number of hours of use in X6 2,500 hours Declining balance rate 35%
If the Production company were to use the method of depreciation proportional to use (according to production units) for its equipment, the depreciation expense for year X6 would be:
a) $ 25,000 b) $ 18,000 c) $ 20,000 d) None of the above e) $ 22,500
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