An Amortizable Asset with a Cost of $42,500 Has a Residual

question 81

Short Answer

An amortizable asset with a cost of $42,500 has a residual value of $2,500 and a useful life of 8 years.Total estimated units of output are 80,000 and in year 1, 5,200 units were produced.Under the straight-line method and the units-of-activity method the amortization expense for the first year would be: $\begin{array}{ll}\text { Straight-line }&\text { Units-of-activity }\\\text { a. } \$ 5,000.00 & \$ 2,600.00 \\\text { b. } \$ 5,000.00 & \$ 2,762.50 \\\text { c. } \$ 5,312.50 & \$ 2,600.00 \\\text { d. } \$ 5,312.50 & \$ 2,762.50\end{array}$

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