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docker41 [41]
3 years ago
15

On January 1, Year 1 Missouri Co. purchased a truck that cost $49,000. The truck had an expected useful life of 10 years and a $

5,000 salvage value. Missouri uses the double declining-balance method. What is the amount of depreciation expense recognized in Year 2?
Business
1 answer:
serg [7]3 years ago
8 0

Answer:

The amount of depreciation expense recognized in Year 2= $7,800.

Explanation:

<u>Determine the depreciation base</u>

The depreciation base = Acquisition cost - Residual/Salvage value.

The depreciation base = 49,000 - 5,000

The depreciation base = $44,000.

<u>Determining the depreciation rate</u>

The depreciation rate = depreciation base / Useful life

The depreciation rate = 44,000/10

The depreciation rate = $ 4,400.

<u>To determine depreciation % rate </u>

Depreciation  % rate = (The depreciation rate  / depreciation base) × 100

Depreciation  % rate = (4,400 / 44,000) × 100

Depreciation % rate = 10 %

But since Missouri Co. uses double declining balance method of depreciation, the correct depreciation % rate is 10 × 2 = 20%

<u>Determining the depreciation expense for year 2</u>

Year 2 depreciation expense is computed as follows:

(Acquisition cost - year 1 depreciation expense) × Depreciation % rate

Depreciation expense for year 2 is computed as:

Acquisition cost × Depreciation % rate = 49,000 × 20%

Year 1 depreciation expense = $9,800.

Therefore year 2 depreciation expense = (49,000  - 9,800.) × 20%

Therefore year 2 depreciation expense = $ 7,800.

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Explanation:

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C. No, it will increase cost by $100.

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cost for consolidating them into one shipment= $1300 + 3($100) = $1300 + $300 = $1600

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Which of the following tactics might public sector unions use to increase management's cost of disagreeing with the union positi
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Answer:

D. All the above are legal tactics that the union can use to pressure management to accept the union's position on an issue.

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Taylor Entertainment Center has 5 TVs on hand at the balance sheet date that cost $400 each. The net realiz- able value is $350
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Answer:

Under the lower-of-cost-or- net realizable value basis of accounting for inventories, the value that Taylor should report for the TVs on the balance sheet is $350 × 5 = $1,750

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Many demographers predict that the United States will have zero populationgrowth in the twenty-first century, in contrast to ave
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Answer:

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