Question
On 1/1/16, a company purchased a truck for $50,000. The truck was expected to be used for 5 years after which it would be worthless.
On 1/1/16, a company purchased a truck for $50,000. The truck was expected to be used for 5 years after which it would be worthless. On 1/2/19, the company had to replace the trucks motor and transmission at a cost of $12,000. This $12,000 cost to repair the truck would extend the useful life of the truck for 4 years beyond the original estimate of useful life. The $12,000 repair cost should be
a. Expensed in 2019. | ||
b. Depreciated over 2019 and 2020, the final 2 years of the original estimate of useful life. | ||
c. Depreciated over 2019, 2020, 2021 and 2020, the 4-year increase in the trucks life. | ||
d. Depreciated over 2019, 2020, 2021, 2022, 2023 and 2024, the remaining life according to the new estimate. | ||
e. Depreciated over the 4 years of extended life, beginning in 2021. |
Equipment was purchased on 1/1/14 for cash of $45,000. The useful life was estimated to be 10 years and the salvage value was estimated at $5,000. Using the double-declining balance method, how much depreciation expense would be recognized for the first full year of the assets estimated useful life?
a. $ 9,000 | ||
b. $ 8,000 | ||
c. $ 4,500 | ||
d. $ 4,000 |
Same data as previous question: Equipment was purchased on 1/1/14 for cash of $45,000. The useful life was estimated to be 10 years and the salvage value was estimated at $5,000. Using the double-declining balance method, how much depreciation expense would be recognized for the second full year of the assets estimated useful life?
a. $ 6,200 | ||
b. $ 6,400 | ||
c. $ 7,200 | ||
d. $ 7,400 | ||
e. $ 1,800 |
Same data as previous question: Equipment was purchased on 1/1/14 for cash of $45,000. The useful life was estimated to be 10 years and the salvage value was estimated at $5,000. Using the double-declining balance method, how much depreciation expense would be recognized for the third full year of the asset's estimated useful life?
a. $ 5,760 | ||
b. $ 5,714 | ||
c. $ 5,120 | ||
d. $ 5,000 | ||
e. $ 360 |
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