Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2016 and was used 2,700 hours in 2016 and 2,600 hours in 2017.

If Norwood uses the double-declining-balance depreciation method, what amount is the depreciation expense for 2017?

a.$20,000

b.$15,000

c.$14,063

d.$18,750

Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2016 and was used 2,700 hours in 2016 and 2,600 hours in 2017.

What amount will Norwood, Inc. report as depreciation expense over the 8-year life of the equipment?

a.$80,000

b.$60,000

c.$75,000

d.$72,000

Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2016 and was used 2,700 hours in 2016 and 2,600 hours in 2017.

Based on this information, what method of depreciation will produce the maximum depreciation expense in 2017?

a.All methods produce the same expense in 2017.

b.Units-of-production

c.Straight-line

d.Double-declining-balance

Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life of 8 years, or 12,500 hours of operation. The crane was purchased on January 1, 2016 and was used 2,700 hours in 2016 and 2,600 hours in 2017.

Based on this information, what method of depreciation will produce the maximum depreciation expense in 2016?

a.Units-of-production

b.All methods produce the same expense in 2016.

c.Straight-line

d.Double-declining-balance

A company should choose a depreciation method that

a.saves the most taxes.

b.best allocates the original cost of the asset to the periods benefited by the use of the asset.

c.minimizes net income

d.shows the highest amount of net income.