Asked by Sheana Serena on May 01, 2024
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On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years or 30,000 hours.Using straight-line depreciation, calculate depreciation expense for the second year.
A) $17,500
B) $30,000
C) $12,500
D) $40,000
Straight-Line Depreciation
A method of allocating an asset's cost evenly across its useful life, resulting in the same depreciation expense each year.
Depreciable Cost
The total cost of a tangible asset that can be depreciated over its useful life, excluding salvage value.
Depreciation Expense
Dividing the expense of a material asset throughout its service life.
- Excel in determining depreciation values via diverse strategies and grasp the variables that influence the selection of a particular method.
- Acknowledge the consequences of adjusting asset values and modifying their anticipated useful lifespan on the calculation of depreciation.
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Learning Objectives
- Excel in determining depreciation values via diverse strategies and grasp the variables that influence the selection of a particular method.
- Acknowledge the consequences of adjusting asset values and modifying their anticipated useful lifespan on the calculation of depreciation.
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