On June 1, Michael Company Purchased Equipment at a Cost

question 166

Multiple Choice

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

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Definitions:

Long-Term Liabilities

Debts or obligations that are due more than one year in the future.