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Marrrta [24]
3 years ago
14

Kate Company purchased a tractor at a cost of $120,000. The tractor has an estimated salvage value of $20,000 and an estimated l

ife of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2016 and was used 2,400 hours in 2016 and 2,100 hours in 2017. What method of depreciation will produce the maximum depreciation expense in 2017
Business
1 answer:
Irina18 [472]3 years ago
5 0

Options :

A) Straight-line

B) Units-of-production

C) Double-declining-balance

D) All methods produce the same expense in 2017

Answer:

C.) Double declining balance

Explanation:

Given the following:

Cost of tractor = $120,000

Salvage value = $20,000

Estimated life = 8 years or 12000 hours of operation

Purchase date = January 1, 2016

2016 usage = 2400 hours

2017 usage = 2100 hours

Depreciation Expense :

Using the straight line Depreciation :

(120,000 - 20,000) / 8 = 100,000 / 8 = $12,500

Double declining balance :

(100%)/8 = (0.125) * 2 = 0.25

0.25 * 120,000 = 30,000

Unit of production:

(120,000 - 20,000) * (2100 / 12,000)

= 100,000 * 0.175 = $17500

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Based on the information given with regards to the question, this is a personal defense. A personal defense occurs when there's a breach of contract whereby there was issuing of the negotiable instrument.

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Sue spent much of her time checking inventories, processing straight rebuys, setting up displays and making sure everything is g
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(D) order taker.

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2 years ago
In the recent years, prices of basic food commodities such as corn, rice, and wheat have increased sharply. A recent article in
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Answer:

I, II and III.

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3 years ago
The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Data on sales and
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Explanation:

Income statement

Dirk bike mountain bike. Racing bike. Total

$ $ $ $

Sales. 264,000. 407,000 256,000 927,000

Less :Variablecost 114,000. 200,000 157,000. 471,000

----------- -------------- ------------- ------------

Contribution margin 150,000 207,000 99,000 456,000

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Allocated common fixed expenses 52,800 81,400 51,200. 185,400

----------- ------------- ---------- -------------

Total Fixed Expenses 123,300 167,400. 124,000 414,700

Net operating income(loss) 26,700 39,600 (25,000) 41,300

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(2) it should be discontinued since it cannot provide a contribution towards meeting its fixed cost

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