A Factory Machine Was Purchased for $90,000 on January 1

question 113

Multiple Choice

A factory machine was purchased for $90,000 on January 1, 2011.It was estimated that it would have a $18,000 residual value at the end of its 5-year useful life.It was also estimated that the machine would be run 40,000 hours in the 5 years.The company ran the machine for 4,000 actual hours in 2011.If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2011 would be

• A)$9,000.
• B)$14,400.
• C)$18,000.
• D)$7,200.

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Definitions:

R-12

Theoretically illegal but still available refrigerant. GWP rating is 10,900.

Vacuum Pump

A device that removes gas molecules from a sealed volume in order to create a partial vacuum.

Refrigerant Container

A special container designed to hold refrigerant, a substance used in air conditioning systems to absorb and release heat, under pressure.

Ozone

Triatomic oxygen (O3); an oxygen molecule consisting of three bonded oxygen atoms. The ozone layer in the Earth’s stratosphere helps protect the atmosphere from harmful solar ultraviolet radiation.