over its useful ece of heavy s. The estimate ear and 27.000 balance (DDB) and the period over which an asset should te up d. Depreciation is a process of allocating the cost of an asset to expense over life. Q7-56. At the beginning of last year, Bratworth Corporation purchased a piece of equipment for $99,000. The equipment has a life of five years or 100,000 hours. Th residual value is $9.000. Bratworth used the equipment for 21.000 hours last year an hours this year. Depreciation expense for year two using double-declining-balance units-of-production methods would be as follows: DDB UOP a. $23.760 $26,730 b. $21.600 $26,730 c. $21.600 $24.300 d. $23.760 $24,300 Q7-57. Madison Corporation acquired a machine for $27,000 and has recorded depre for two years using the straight-line method over a five-year life and $8,000 residual va the start of the third year of use, Madison revised the estimated useful life to a total of 10 Estimated residual value declined to $0. How much depreciation should Madison record in each of the asset's last eight years the is, year 3 through year 10), following the revision? a. $2,700 c. $2,425 b. $10,800 d. Some other amount corded depreciation 000 residual value. At to a total of 10 years Q7-58. Kline Company failed to record depreciation of equipment. How does this omission affect Kline's financial statements? a. Net income is overstated and assets are understated. b. Net income is overstated and assets are overstated. c. Net income is understated and assets are overstated. d. Net income is understated and assets are understated. 07-59. Acton, Inc., uses the double-declining-balance method for depreciation on its computers. Which item is not needed to compute depreciation for the first year? a. Estimated residual value c. Original cost b. Expected useful life in years d. All the items listed are needed