Question 20

Reminder - Here is the equipment information from Production Inc:

Purchase on January 1 X5

Estimated useful life

Estimated residual value

Number of total hours of expected use

Number of hours of use in X5

Number of hours of use in X6

Declining balance rate

$100,000

5 years

$10,000

10,000 hours

3,000 hours

2,500 hours

35%

If the Production company used the method of depreciation proportional to use (according to the units of production) for its equipment, the depreciation expense for the year X6 would amount to:

none of the above

$20,000

$18,000

$22,500

$25,000