Asked by Jordan Hidayat on May 29, 2024
Verified
Worth Manufacturing Company purchased a new production machine on July 1, 2010, for $140, 000.The estimated salvage value is $10, 000.The company uses units-of-production depreciation and estimates the machine will produce 100, 000 units during its useful life.In 2010, the company manufactured 5, 000 units after acquiring the machine.Depreciation expense for 2010 will be
A) $ 0
B) $ 6, 500
C) $ 7, 000
D) $13, 000
Units-Of-Production Depreciation
A depreciation method that allocates expense based on the actual usage or production of an asset.
Salvage Value
The anticipated worth of an asset at the conclusion of its effective life.
- Calculate value depreciation by utilizing different systems such as double-declining balance, straight-line, and units-of-production methods.
Verified Answer
RC
Rocky ChannelJun 01, 2024
Final Answer :
B
Explanation :
The depreciation expense is calculated based on the units-of-production method, which is [(Cost - Salvage Value) / Total Estimated Units] * Units Produced in 2010 = [($140,000 - $10,000) / 100,000] * 5,000 = $6,500.
Learning Objectives
- Calculate value depreciation by utilizing different systems such as double-declining balance, straight-line, and units-of-production methods.
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