Understanding the Business Transaction

Depreciation expense measures- Select your answer -

the cash needed to replace an asset

the decline in market value of a fixed asset

the allocation of a fixed asset's cost to expense over the asset's useful life

Correct 1 of Item 2

. A company should record an expense for the cost of long-term fixed assets- Select your answer -

in the year the asset is purchased

periodically over the life of the asset

never

Correct 2 of Item 2

. The double-declining balance method provides for- Select your answer -

equal amounts

increasing amounts

decreasing amounts

varying amounts (based on quantity of units produced)

Correct 3 of Item 2

of depreciation expense during each year of the asset's useful life.

Jasmine Company purchased equipment on January 1, 20x1. This is the only equipment that Jasmine company owns, and it has the following information:

Initial cost$192,570Estimated residual value$13,370Expected useful life10yearsTotal estimated hours of useful life18,140hoursDepreciation MethodDouble-Declining BalanceHours operated during 20x12,300Hours operated during 20x22,080When required, round your answers to the nearest dollar.

Jasmine Company would report $of depreciation expense in its December 31, 20x1 income statement, and $of depreciation expense in its December 31, 20x2 income statement.