Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Part 1: On January 1, Year 1, Friedman Company purchased a truck that cost $32,000. The truck had an expected useful life of 200,000 miles

Part 1:

On January 1, Year 1, Friedman Company purchased a truck that cost $32,000. The truck had an expected useful life of 200,000 miles over 8 years and an $7,000 salvage value. During Year 2, Friedman drove the truck 35,000 miles. Friedman uses the units-of-production method. What is depreciation expense in Year 2? (Do not round intermediate calculations.):

  • $4,375

  • $5,600

  • $3,125

  • $4,000

Part 2:

On January 1, Year 1, Phillips Company made a basket purchase including land, a building and equipment for $800,000. The appraised values of the assets are $48,000 for the land, $760,000 for the building and $112,000 for equipment. Phillips uses the double-declining-balance method for the equipment which is estimated to have a useful life of four years and a salvage value of $10,000. What is the depreciation expense for the equipment for Year 1? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Round your intermediate percentages to four decimal places: ie .054231 = 5.42%.)

  • $56,000

  • $28,000

  • $24,340

  • $48,680

Part 3:

On January 1, Year 1, Li Company purchased an asset that cost $75,000. The asset had an expected useful life of five years and an estimated salvage value of $15,000. Li uses the straight-line method for the recognition of depreciation expense. At the beginning of the fourth year, the company revised its estimated salvage value to $7,500. What is the amount of depreciation expense to be recognized during Year 4?

  • $15,750

  • $12,000

  • $31,500

  • $19,500

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions