1. Units of Production depreciation:
2. is an appropriate method to use for buildings
3. generally produces the same annual depreciation each year
4. uses a different depreciation rate each year
5. is based on how much an asset is used, regardless of how long it is owned
6. is based on how long an asset is owned, regardless of how much it is used

2 points

QUESTION 11

1. On January 12, 20X1, your company purchases a machine for $125,000 with an estimated useful life of 15 years and a salvage of $5,000. Your company uses SYD depreciation and depreciates assets purchased between the 1^stand 15^thof the month for the entire month; assets purchased after the 15^thof the month are treated as though they were acquired the following month. What is the machine's book value at the end of 20X1?
2. $109,375
3. $110,000
4. $111,250
5. $110,677

2 points

QUESTION 12

1. For assets acquired during the year (i.e. not on January 1), the Units of Production method requires that depreciation is recorded for only a portion of the first year. To do this the first year depreciation amount is prorated to reflect the amount of time that the asset was actually owned by the company (i.e. number of days or number of months).
2. True
3. False

2 points

QUESTION 13

1. On January 1, 20X1, ZipCo, which uses UOP depreciation, purchasesa truck for $24,000 with an estimated useful life of 100,000 miles and a residual value of $4,000. Miles driven are as follows:
2. Year
3. Miles
4. 20X1
5. 20,000
6. 20X2
7. 15,000
8. 20X3
9. 10,000
10. 20X4
11. 25,000
12. 20X5
13. 30,000
15. Depreciation expense for the truck is 20X1 is:
16. $20,000
17. $4,000
18. $4,800
19. $24,000

2 points

QUESTION 14

1. On January 1, 20X1, your company purchases for $550,000 a machine with an estimated useful life of 10 years and a salvage value of $50,000. Using SYD depreciation, the 20X2 depreciation expense is:
2. $18,182
3. $200,000
4. $90,000
5. $81,818

2 points

QUESTION 15

1. On May 1, 20X1, your company purchases a machine for $260,000 with an estimated useful life of 12 years and a salvage value of $10,000. Your company uses SYD depreciation and depreciates assets purchased between the 1^stand 15^thof the month for the entire month; assets purchased after the 15^thof the month are treatedas though they were acquired the following month. What is 20X2 depreciation expense?
2. $36,667
3. $35,256
4. $34,872
5. $36,325

2 points

QUESTION 16

1. Under the sum-of-the-years' digits method:
2. the denominator of the SYD fraction changes each year
3. the book value remains the same each year
4. less depreciation is taken in the early years of an asset's life, and more in the later years
5. more depreciation is taken in the early years of an asset's life, and less is taken in later years

2 points

QUESTION 17

1. On July 8, 20X1, your company purchases a machine for $100,000. Your firm uses the DDB method. Assets purchased between the 1^stand 15^thof the month are depreciated for the entire month; assets purchased after the 15^thof the month are treated as though acquired the following month. Management estimates the machine will last 8 years and have a salvage value of $35,000. The book value at the end of 20X1 is:
2. $83,750
3. $87,500
4. $75,000
5. $91,875