Equipment with a Cost of $300,000 Has an Estimated Salvage

question 115

Multiple Choice

Equipment with a cost of $300,000 has an estimated salvage value of $20,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

• A) $75,000.
• B) $70,000.
• C) $75,600.
• D) $72,500.

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