Question
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.):
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$4,375
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$5,600
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$3,125
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$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%.)
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$56,000
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$28,000
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$24,340
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$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?
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$15,750
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$12,000
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$31,500
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$19,500
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